Ukrainian soybean market - new records

Source

APK-Inform

24392

 

Ukraine is increasing production of soybeans and by-products during the last 5 years due to high interest of importers. APK-Inform forecasts soybean production in Ukraine to grow by 5% that will lead to higher exports of by-products. Soybean meal exports can reach 430 thsd tonnes (+27% on year). However, there is ASF problem in Ukraine that can affect soybean processing.

 

Stable soybean production growth

Over the last 5 years soybean production in Ukraine is constantly growing as well as export demand and processing capacities.

In 2015/16 MY, area under soybean increased the most among all oilseeds. Planted and harvest areas increased to 2.16 mln ha (+19.5%) and 2.14 mln ha (+19.1%) correspondingly. However production growth was moderate (+1.3%) due to lowering of yield by 15% (average 2.1 t/ha) because of adverse weather.

The situation was opposite in 2016. Despite decline of planted area to 1.86 mln ha (-13.8%) APK-Inform forecasts production to reach 4 mln tonnes (+5%) due to better yield – 2.18 t/ha (+22%).

 

 

APK-Inform forecasted some decline of soybean exports to 2.2 mln tonnes in 2016/17 MY, against 2.37 mln tonnes season ago due to higher processing. The Middle East, North Africa and the EU were the key importers of Ukrainian soybean in 2015/16 MY.

 

Ukraine: companies-exporters of soybeans in 2015/16 MY

No

Name

Volume

Share

1

Greentour-Ex

273,02

12%

2

ADM Trading Ukraine

152,49

6%

3

Kernel-Trade

137,73

6%

4

Nibulon

93,12

4%

5

YugAgroSbut

74,31

3%

6

Galnaftogaz Concern

61,61

3%

7

NF Trading Ukriane

54,64

2%

8

Cargill

50,30

2%

9

Hors Croup

38,97

2%

10

UkrElevatorProm

38,23

2%

 

Other

1 393,6

59%

 

Total

2 368,0

100%

According to the custom statistics

 

Price trend

By the end of 2015/16 MY, trade activity on soybean export market was high. The maximum demand prices were observed in late June – early July and reached 420-430 USD/t FOB and 405-410 USD/t СРТ.

 

 

The bid prices on domestic market had been growing a bit in 2015/16 MY due to reserved market selling and situation on export market. In early July – mid-August maximal demand prices totaled 11100-11400 UAH/t EXW. The offer prices reached 11500 UAH/t EXW.

In early 2016/17 MY, downward trend prevailed on the market as new crop entered the market. Processors were ready to buy at 10000-10500 UAH/t СРТ. Exporters purchasing prices varied between 10600-11000 UAH/t EXW.

 

 

Soybean by-products

According to APK-Inform, in 2015/16 MY Ukrainian crushers processed 1.15 mln tonnes of soybean for oil (+14%) due to development of processing capacities through launch of new large plant owned by MHP (1000 t/d).

Soybean oil production and exports reached 184 thsd tonnes (+14%) and 152.5 thsd tonnes (+12%) correspondingly.

China (82.3 thsd tonnes), Poland (46.6 thsd tonnes), Spain (8.3 thsd tonnes), Malaysia (4.1 thsd tonnes) and Lithuania (4 thsd tonnes) were the key destinations for Ukrainian oil. Myronivsky Plant for Manufacturing Groats and Feeds, Globino Cannery “Globus”, Kakhovka Protein Agro, Volochysk-Agro and TH Majola were the main exporters of the product.

APK-Inform forecast increase of soybean processing for oil to 1.4 mln tonnes (+22%) in 2016/17 MY due to higher crop and prospect of lower soybean exports. Production of the oil can reach 225 thsd tonnes (+22%) and its exports can increase to 200 thsd tonnes (+31%).

 

 

It should be noted that Vioil company planned to build new soybean and rapeseed processing plant with capacity at 1.1 thsd tonnes and 1.5 thsd tonnes per day correspondingly. However as Vinnitsa oblast is among those with ASF problem the company delayed the project.

Market operators suppose that development of soybean processing capacities will increase competition on soybean market and cause price volatility. At the same time, processors’ margin is an important factor too. “In case of low margin processors will decreased crushing that will lead to lower soybean demand and worse liquidity. Export could not change the situation significantly as global supply is high”, – commented M.Ponomarenko, senior Agritel consultant.

 

 

In 2015/16 MY, Ukraine produced record soybean meal/cake volume – 870.5 thsd tonnes (+14%). Higher production and favorable export market situation allowed the country to export 338.4 thsd tonnes of the product (+59%).

Belarus (109.5 thsd tonnes), Turkey (51.2 thsd tonnes), Georgia (47.3 thsd tonnes), India (27.3 thsd tonnes) and Poland (21.9 thsd tonnes) were the key importers of Ukrainian soybean meal/cake.

 

 

Prospects

During the first months of the season, the global soybean market was under pressure due to expected record crop in key countries. Thus, prices for Ukrainian product declined. However, demand for Ukrainian soybean is high. So, experts suppose that export market will develop depending on harvesting/sowing campaign in US and South America.

The Middle East, North Africa and the EU are the perspective destinations for Ukrainian soybean, their interest is high.

The market of soybean by-products will depend on supply volumes that is rather sufficient and feedstock price.

 

 

 

 

 

 

 

 

 

 

Victoria Zelenaya, APK-Inform Agency

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