The blow to Ukraine’s wheat production from the Russian invasion could lead to another weak wheat harvest in 2023, as a cash squeeze crimps farmers’ planting plans.
Sergey Feofilov – general director at analysis group UkrAgroConsult, and one of the top commentators on Ukraine grains – said in response to a GrainPriceNews question that it was “really of top importance” to consider the potential for another disappointing crop in 2023.
He forecast the imminent 2022 wheat harvest at “slightly below” 20m tonnes, down from the record 32m-tonne crop last year.
And it will kick off fresh headaches in its aftermath – one being how growers, if they are unable to sell their crop, will raise the cash to finance plantings of winter wheat which will be harvested in 2023.
‘What will be their decision?’
If growers have a “low possibility to sell wheat, export wheat” it raised questions of how they will “finance winter wheat plantings just in three months”, Mr Feofilov told the International Grains Council conference in London.
“This is a problem. Key problems with production might be in 2023.”
Ukraine farmers were financed “75-85% from their own incomes, from their margin, from their own pockets,” he said,
But it is “not clear if Ukrainian farmers are able to sell the 2022-23 harvest, and receive money. What will be their decision if they are not able to sell the grain?”
Although banks had supported spring sowings, the autumn planting campaign would require “at least five or six times” as much support, he said.
If they do not receive such help, “they will simply not be able to buy inputs to plant winter wheat to guarantee wheat production in 2023”.
Another problem that farmers faced was “where to store wheat stocks”, given a “rather high” carryover stockpile of 4m-4.5m tonnes left over from 2021-22.
On top of this, Ukraine faced the imminent wheat harvest of 20m tonnes “with a deficit of storage”.
He forecast Ukraine wheat exports for 2022-23, as starts next month, at “about 16m tonnes, if the market and ports operate as usual.
“If not, we suppose that next season exports will be at level of 10m tonnes.”