In 2013/14 MY Ukraine may increase wheat flour exports by 15%
According to analysts of APK-Inform Agency, in the current season Ukraine produced one of the largest wheat harvests during the recent ten-year period, at the level of 22.3 mln tonnes. At the same time, milling wheat formed nearly 70% of the grain production volumes (15.6 mln tonnes), which is quite enough for provision of the domestic milling industry, and formation of rather good export potential. So, during the period of July 1, 2013 - April 29, 2014, Ukraine exported over 7.2 mln tonnes of wheat. Thus, in terms of rather significant supply volumes of wheat on the world market, the grain prices are heavily influenced by the global economic situation, and the world conjuncture is formed taking into account the Ukrainian market. Therefore, the situation in Ukraine significantly influenced the prices for milling wheat, causing its growth in the second half of the season. In addition, wheat grain in Ukraine is considered as a "strategic grain", and agricultural producers often prefer holding down its reserves in terms of various market fluctuations. The reporting situation is observed in the second half of the season. That is why grain millers are quite difficult to purchase the required grain batches for further processing at the reasonable prices, although wheat stocks are quite sufficient on the market. So, as of April 1, 2014, wheat stocks in agricultural enterprises, storage and processing facilities were estimated at the level of 4.5 mln tonnes.
As for the exports of flour, it should be noted some increase of the commodity deliveries and reorientation towards the selling markets of Asia (especially, China). It should serve as the good stimulus for further development of the flour milling industry. But to date, declining of the profitability of flour production and possible logistical problems with export sales do not allow to give any optimistic forecasts. It should be noted that the port terminals of the Azov Sea are under threat, because they supply most of grain by-product volumes from Ukraine, including flour. In the current season the export potential of Ukrainian flour is estimated by experts of APK-Inform at the level of 230 thsd tonnes, which may become the record index, up 15% compared with the exports in 2012/13 MY (199 thsd tonnes). But the reporting difficulties can cause a downward correction of the index.
You can receive more detailed data on the market prospects of Ukrainian grain by-products from the report of Sergyi Sakirkin, Director of the grain processing department of PJSC State Food and Grain Corporation of Ukraine, at the thirteenth international conference "Grain Forum - 2014: new markets, challenges and opportunities", held on June 16-18 in Odessa.
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