UGA calls on Government to resume wheat exports over sizable carry-overs
The Ukrainian Grain Association (UGA) is calling on the relevant ministries to resume wheat exports and to cancel licencing.
UGA marks that since Ukraine has excessive carry-over stocks of last season's crop and grain exports are impossible due to the blocking of Ukrainian seaports, the cancellation of the export licence will make the export mechanism simpler and free up storage capacity for the new crop.
The association notes that producers in Ukraine harvested a record wheat crop of over 33 mln t in 2021, while the domestic market consumes about 5-7 mln t of both milling and feed wheat together. And given the pandemic and the government's plan to form a record carry-overs surplus, market participants have confirmed their commitment to export 25.3 mln t of wheat.
"As of March 1, wheat export from Ukraine reached 18.2 mln t of the agreed 25.3 mln t. Considering the record-high carry-over stocks, grain elevators in Ukraine are now providing for the storage of 12 mln t of wheat. It is less than 12 weeks remaining until the new crop is harvested. The domestic consumption in this period is expected at around 1.5 mln t," the message reads.
While maritime ports are blocked by russia, exporters can only deliver grain to foreign markets via land routes. And according to UGA estimates, so far the throughput capacity of land crossings is limited to 20,000 t per day, which is 10x less than the capacity of Ukrainian ports. Thus, under current logistical conditions, Ukraine will be able to export no more than 2 mln t of grain, including wheat and corn.
"Today Ukraine has around 22 mln t of grain remaining in storage facilities, which could be exported bearing no risk to Ukraine's food security. Given the tendency to produce more than 100 mln t of grain annually, and the unexported balances taken into account, Ukraine could face a major problem of grain storage capacity availability," UGA says in a statement.
As a reminder, Ukrzaliznytsia increased grain cargoes shipment to 670 thou. t in March.
