Start of 2017/18 MY on the Ukrainian market of rye, buckwheat and by-products - impact of the imports





According to the analysis of statistics figures, Ukraine gradually started becoming the country-importer of rye and buckwheat and its by-products, instead of the previous role of producer and exporter of the reporting grain crops. Despite relatively high bid prices for the grains, agrarians preferred growing other more profitable crops. At the same time, the raw materials and products from neighbouring countries began dominating on the Ukrainian market of rye, buckwheat and its by-products, in particular Belarus and Russia. Whether the situation in the market sector to change in the nearest future?


Rye and rye flour

According to APK-Inform analysts, in the period from 2013/14 MY to 2016/17 MY the planted areas under rye in Ukraine decreased from 284 thsd ha to 143 thsd ha. And in the reporting period, the production volumes of rye decreased from 638 thsd tonnes, to 392 thsd tonnes, respectively. At the same time, in the reporting period the domestic consumption of rye decreased from 515 thsd tonnes in 2013/14 MY, to 430 thsd tonnes in 2016/17 MY. Taking into account the export volumes, which totaled 12 thsd tonnes in 2016/17 MY, such situation caused the inevasible deficit of the rye total supply on the domestic market, and consequently, the bullish trend.

The reporting factors contributed to the growth of rye planted areas in 2017/18 MY to 170 thsd ha, which provided the harvest volumes at 459 thsd tonnes. In turn, APK-Inform analysts forecasted the domestic consumption of rye in Ukraine in the current season at 450 thsd tonnes. And taking into account the carry-over stocks of 175 thsd tonnes, Ukraine will completely manage to cover the figures.

At the same time, in the period of 2012-2016 the production volumes of rye flour in Ukraine reduced from 161 thsd tonnes to 94.7 thsd tonnes, which affected the export volumes of the product. During 2 recent seasons, the exports almost halved – from 886.1 tonnes in 2015/16 MY, to 389.7 tonnes in 2016/17 MY. But the imports of rye flour in Ukraine significantly increased, and if in 2015/16 MY the figures slightly exceeded 21 thsd tonnes, then last season the imports exceeded 36.8 thsd tonnes of rye flour of mainly Belarusian origin.

Such situation considerably complicated the work of Ukrainian grain processing enterprises, which had to work in terms of a deficit of raw materials, and impossibility to significantly increase the prices due to a competition with the cheaper Belarusian rye flour.


Production of milling rye in Ukraine


2013/14 MY

2014/15 MY

2015/16 MY

2016/17 MY

2017/18 MY*

Planted areas, `000 ha






Yield, t/ha






Production, `000 tonnes






* Forecast

Hereinafter, source: APK-Inform Agency


In 2016/17 MY, the market of milling rye and rye flour demonstrated a bullish trend, due to insufficient number of grain supply, caused by low harvest volumes, and slowing down of sales by agrarians. In mid-April, the prices demonstrated the most significant upward trend, and by mid-May the prices for milling rye reached its maximum value – 4`500 UAH/t CPT (bids). In turn, the average selling prices for rye flour varied at the level of 5400 UAH/t EXW, and in some cases the maximum prices reached 6`000-6`300 UAH/t EXW.

In the beginning of 2017/18 MY, most grain processing plants reduced the average prices for milling rye by 200-500 UAH/t - to 3550-4000 UAH/t CPT, because expected for coming of new crop grain. At the same time, agrarians preferred selling small batches of the grain. Therefore, the buyers which required urgent forming of raw material volumes to work in the medium term, had to rise their bid prices to 4`200 UAH/t CPT. To date, the supply of new crop rye demonstrates rather active rates on the market, which stimulates further reducing of the bid prices to 3`200-3`800 UAH/t CPT, as well as the offer prices for finished products, which often vary within the range of 4`800-5`400 UAH/t EXW, and only in some cases reached 5`600-5`800 UAH/t EXW.

According to market participants, the competition fight with the cheaper Belarusian rye flour provides the key pressure on the pricing situation in the market segment. Only in the first month of 2017/18 MY, Ukraine imported almost 2.3 thsd tonnes of the product. Previously, the exports of Ukrainian rye flour provided some support to the prices, but during 2 recent season such key destinations as Moldova and Israel, significantly decreased their imports of the product. Thus, in 2015/16 MY Ukraine exported 817 of rye flour to Moldova, but in 2016/17 MY the figures totaled 384 tonnes only. Also, the exports to Israel dropped from 49 tonnes to 3 tonnes, respectively.


Buckwheat and buckwheat groats


The similar situation developed on the market of buckwheat: systematic reduction of the planted areas led to the deficit of buckwheat on the domestic market, and a significant growth of prices for raw materials and finished products. At the same time, Ukraine keeps its positions in the TOP-3 of global producers of buckwheat and buckwheat groats, and continues increasing the supply volumes on foreign markets. Thus, if in 2015/16 MY Ukraine exported 410 tonnes of buckwheat grain, then last season the figures rose to 697 tonnes, including 258 tonnes to Poland, 252 tonnes to Hungary, 69 tonnes to Germany, 44 tonnes to Switzerland and Belgium, and 20 tonnes to the United Arab Emirates and Turkey each. Such trend developed in terms of a gradual reduction of the planted areas under buckwheat and its production volumes, which is observed in Ukraine for quite a long period, and only in 2016/17 MY the country demonstrated some positive dynamics.

According to APK-Inform analysts, in the period from 2013/14 to 2015/16 MYs the planted areas under buckwheat reduced by more than 50 thsd ha, which resulted in decreasing of the grain production volumes in Ukraine from 179 thsd tonnes, to 128 thsd tonnes, respectively. At the same time, high bid prices for the grain contributed to some reorientation of agrarians towards cultivation of the grain, and in 2016/17 MY the general harvest of buckwheat in Ukraine reached 176 thsd tonnes. However, such volumes were insufficient to meet the country's domestic and export requirements, which caused a significant increasing of the imports of raw materials and a collapse of prices for buckwheat and its by-products on the domestic market. In particular, if in 2015/16 MY Ukraine imported slightly over 8 thsd tonnes of buckwheat, then in the season-2016/17 the figures rose to almost 10 thsd tonnes.

We should note that the positive dynamics of Ukrainian buckwheat production will continue developing in 2017/18 MY, but it does not mean that the country will reduce the import volumes of raw materials. According to APK-Inform statistics figures, in the current season the planted areas under buckwheat totaled 184 thsd ha, and the average yield - 1.09 t/ha, which provided the production volumes at 198 thsd tonnes. Also, in 2017/18 MY the domestic consumption also increased, and will reach 180 thsd tonnes.


Buckwheat production in Ukraine


2013/14 MY

2014/15 MY

2015/16 MY

2016/17 MY

2017/18 MY*

Planted areas, `000 ha






Yield, t/ha






Production, `000 tonnes






* Forecast


As for development of the price situation in the market segment, it should be noted that increasing of buckwheat production led to the fact that despite the dominance of an upward trend in 2016/17 MY, the grain and by-products prices failed to reach its maximum rates in 2015/16 MY, when bid prices for buckwheat grain varied within 18`000-22`500 UAH/t CPT, and offer prices for buckwheat groats totaled 27`500-42`000 UAH/t EXW.

Since the beginning of October 2016, many grain processors had to gradually raise the prices to attract large-scale grain batches in order to form the required volumes of raw materials for work in the long-term prospect. The reporting trend developed until late February 2017, when the bid prices reached its maximum values at 15`000-18`800 UAH/t CPT. However, in mid-March the prices moved to a bearish trend. Many agrarians which required urgent replenishment of their floating assets, noted the increasing competition rates on the domestic market (due to purchasing of less expensive raw materials of Russian origin), had to decline their offer prices.

The reporting trend developed in the market segment until the beginning of the 2017/18 MY, and the seasonal factor provided its additional pressure on prices. Thus, as of mid-September 2017 most grain processors declared their bid prices within 8`000-11`000 UAH/t CPT. In turn, most agricultural producers prefer selling buckwheat in small-scale batches, whereas single agrarians provide large-scale batches of the grain, who need to release their granaries and receive funds. There were no significant complaints about the qualitative indices of new crop buckwheat.

Due to the influence of the market of raw materials, offer prices in the market sector of buckwheat groats somewhat reduced. To date the average selling prices reached 19`000-23`000 UAH/t EXW, and only in some cases, the selling prices totaled 25`000 UAH/t EXW. At the same time, single grain processors declared their offer prices for buckwheat groats at 16000 UAH/t EXW, due to low consumer activity.


Generally, the two markets - milling rye and buckwheat grain - faced their difficult periods. Reduction of the planted areas and reduction of the profitability of finished goods led to increasing of the need for imports, which "hits" the domestic production. According to market operators, the domestic and export potential of the Ukrainian market of buckwheat exceed the present figures, and therefore agrarians should increase the planted areas to nearly 350-500 thsd ha.

As for the price situation, in the short term there is expected a further increase of the supply of new crop milling rye and buckwheat which will also cause some lowering of the prices.


Anna Tanskaya, APK-Inform Agency