Wheat production in Ukraine forecast 26% higher in 2021
Considering the pace of wheat harvesting in Ukraine both based on the operational data of the Agrarian Ministry and the State Statistics Service, analysts at APK-Inform revised upward the estimate of grain production in Ukraine in 2021 to a record 31.2 mln t, 26% up YoY (2020: 24.9 mln t) and 8% above the August forecast (28.8 mln t).
As reported, precipitation in the regions has a strong impact on both wheat and other crops production estimates.
"As per Ukrhydrometeocenter, in most regions of Ukraine during the last four decades, the maximum amount of precipitation exceeded the multi-year norm. These regions include Dnipropetrovsk, Zaporizhzhya, Kirovohrad and Kherson, where a total of 27% of the wheat area 2021 is concentrated," the message reads.
The average yield of wheat in these regions in the current season is 15-20% higher than the maximum for the previous 10 years. However, given the heavy rainfall, further drying of grain may be necessary.
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Analysts note that there is still no objective information regarding the quality of wheat. These factors may lead to a decrease in wheat production indicators in terms of volume after processing.
Through the expected increase in production, wheat export shipment in 2021/22 is also projected to grow to 21 mln t (+26% YoY). However, due to the later start of the harvesting campaign this year, the pace of grain exports is behind the previous season.
"If Ukraine harvests a record corn crop in 2021 and there is no increased demand from wheat importers, the fulfillment of this export potential may be undermined. Accordingly, by the end of season 2021/22 there could be formed high carry-over stocks of grain (3.3 mln t vs. 2.1 mln t in the previous season), which will exert extra pressure on prices, which will be influenced by the expected bumper crop," analysts project.
As of 27 August, the export of grain from Ukraine in the season 2021/22 reached 7 mln t.