Ukraine continues reducing production of flour. According to State Statistics Service, it produced 735.8 thsd tonnes of wheat flour in July-January of 2020/21 MY, down 22% compared to the same period of 2019/20 MY. In January, wheat output totaled 78.3 thsd tonnes only, down 36% compared to January 2020. It was the lowest monthly volume on record.
APK-Inform says there are several factors for decline of flour production. High current prices of milling wheat cut the profitability of flour production. Low demand for flour on both domestic and export markets restrict the output of flour. In July-February of 2020/21 MY, Ukraine exported 93.3 thsd tonnes of flour only, compared to 248.2 thsd tonnes in the same period of the last season (-62%).
At the same time, Ukraine has raised import of flour to record level in 2020/21 MY. It imported 12.9 thsd tonnes of flour in July-February, up 5.3 times year-on-year.
In February, Ukraine imported 95% of total volumes of flour from Belarus at the average weighted prices of 6846 UAH/t. Price monitoring by APK-Inform shows the average offer price of TOP-grade flour on the domestic market reached 11800-12000 UAH/t EXW, of 1-grade flour - 11500-11700 UAH/t EXW in February.
APK-Inform forecasts flour production will decline by 14% to 1.9 mln tonnes in Ukraine in 2020/21 MY, while export will decrease by 57% to 140 thsd tonnes. At the same time, Ukraine may increase wheat import by 2.1 times to 30 thsd tonnes.