Ukraine’s buoyant export volumes slowing…

By Peter McMeekin

Ukraine’s total cereal and legume exports are significantly higher in the current marketing year relative to the 2023/24 program, despite the pace slowing dramatically since the beginning of December following the government’s introduction of a new export regime aimed at curbing tax avoidance on agricultural commodities.

In a bid to prevent the country’s exporters from using artificially low sales prices to avoid paying tax, on December 1 last year, Kyiv introduced minimum export prices, gave the country’s tax and customs service new controls over shipments, and limited export authorization to those firms that currently pay value-added tax.

Essentially, the government has introduced a system that prohibits the sale of agricultural consignments at prices below those set by the government. The minimum acceptable export prices are calculated using state customs service data, taking into account the previous month's trades and delivery terms and applying a 10 per cent discount.

According to a government released statement, the drop in agricultural export volumes since then relative to previous months and the same periods in the 2023/24 marketing year is a direct result of exporters implementing and adapting to the modified export conditions.

Ukraine’s UGA traders union noted that key agricultural commodity export volumes in December fell by 34.7 per cent year-on-year, with shipments via Ukraine’s Black Sea ports the worst hit. UGA data reveals that grain, oilseed and vegetable oil exports collectively totalled almost 4.7MMT in December 2024, down from 7.2MMT in December 2023. Wheat exports fell from 1.84MMT to 789,000 metric tonne, while corn shipments fell from 3.12MMT to 2.5MMT.

'According to the latest trade data released by the Ministry of Agrarian Policy and Food of Ukraine last Friday, cereal and legume exports from the beginning of July last year to January 24 this year totalled 24.75 million metric tonne, 2.5MMT of which have been shipped this month. This is up from 22.25MMT for the previous corresponding period, although the related January portion was much higher in 2024 at 3.68MMT.

Corn made up the most significant proportion of the program at 47.4 per cent, followed by wheat at 42.7 per cent and barley at 8.2 per cent. The three commodities collectively make up 98.3 per cent of the season-to-date exports via all land and seaborne pathways.

The wheat component came in at 10.56MMT, 21.1 per cent higher than the 8.72MMT shipped from July 1, 2023, to January 24, 2024. The January 2025 component was 650,000 metric tonne compared to 1.1MMT a year earlier, reflecting the impact of the government restrictions.

At 11.73MMT, corn exports were actually 2.3 per cent lower than the 12MMT shipped in the previous corresponding period, with the January component of 1.82MMT 23.4 per cent lower year-on-year. The export pace immediately post-harvest was ahead of 2023/24, but being a summer crop, it is harvested after the winter cereals. This means that new crop exports start later so the minimum export price policy has had a greater impact on the corn order flow.

On the barley front, season-to-date exports of 2.04MMT were 60 per cent higher than the 1.27MMT shipped in the first 30 weeks of the 2023/24 marketing year. However, like wheat and corn, the January number was well down season-on-season at just 36,000 metric tonne compared to 199,000 metric tonne a year earlier.

The USDA’s current 2024/25 wheat export estimates for Ukraine is 16MMT, down from 18.6MMT in 2023/24, which means the program is 66 per cent completed, with 30 weeks, or around 58 per cent of the export season behind us. The corn export forecast is 23MMT for an October to September marketing year, down from 29.5MMT last season, putting it at 51 per cent completed with 17 weeks, or around 33 per cent of the marketing year passed.

A lifeline for exporters following Russia’s invasion in February 2022, Ukraine’s grain exports via the Romanian Black Sea port of Constanta from January 1 to November 30, 2024, were down by 54 per cent to 6MMT compared to 2023. Romania has assisted Ukraine with the export of almost 29MMT of grain since February 2022, but the volume through Constanta dropped to just 340,000 metric tonne in November last year.

The drop reflects Ukraine’s reliance on its own Black Sea ports despite constant Russian attacks on logistics and shipping infrastructure. The increase in domestic port throughput has been facilitated by the unmitigated success of its protected maritime export corridor, which hugs the western Black Sea coastlines of Ukraine, Romania, Bulgaria and Greece before exiting via the Bosphorus and onto international customers across the globe. 

The Agriculture Ministry also recently released its planted area forecast for this year’s harvest. Ukraine’s farmers plan to sow 11.1 million hectares down to grains this year, very similar to last year. The estimated area planted to winter cereals last autumn for harvest this year was marginally lower than the previous year, with around 5.2Mha of winter wheat and 600,000 hectares of winter barley.

The spring wheat area is expected to be up 28 per cent to 223,000 hectares, but the spring barley area forecast of 790,000 hectares is down 5.8 per cent compared to 2024. The corn area is expected to be 2.4 per cent higher compared to 2024 at 4.15Mha. The area under oilseeds is projected to be 8.9Mha, including 5.2Mha of sunflowers, up 5 per cent year-on-year, 2.4Mha of soybeans, down 9.4 per cent compared to last year, plus 1.17Mha of winter and spring rapeseed, down 8 per cent relative to plantings for the 2024 harvest.

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