Ukraine continues to face staggering losses to its people and economy as it approaches the three-year mark of Russia’s invasion. But its resilience is paying off as crop production rebounds and alternative trade routes and partners keep agriculture exports moving.
The agriculture industry, which is the third largest contributor to Ukraine’s economy, has been a primary military target for Russia. Ukraine’s amount of arable under its control has dropped to 26.5 million hectares from 32.7 million. In addition to taking land, Russia has blockaded key Ukrainian Black Sea ports to stop grain exports and stolen Ukrainian machinery and crops.
Damage and losses to the agriculture industry from the war had exceeded $80 billion by the end of 2023. Rebuilding is expected to cost $56.1 billion with an additional $32 billion for demining, according to the European Parliamentary Research Service (EPRS). Through EU Solidarity Lanes, the Black Sea Initiative and most recently the Ukrainian Corridor, the nation has managed to keep its economy afloat and export commodities, thereby averting a wider global food security crisis.
The human loss also has been immense with many farmers either killed, displaced or serving in the armed forces. Several of the most prominent figures in Ukraine’s agricultural sector have been killed, including Oleksiy Vadaturskyi, the founder of Nibulon.
Ukraine is well suited for agriculture production with a third of the world’s most fertile land. The nation is mostly flat, and the primary weather is moderate continental with a temperate climate and adequate rainfall, the EPRS said. It has an abundant supply of water with several large rivers, more than 3,000 lakes and 1,100 artificial water reservoirs.
Its top three commodities include wheat, corn (maize) and sunflowers, with most production intended for export. While production dropped in 2022-23, Ukraine has seen record yields and increased estimates for corn, wheat and soybean totals in the 2023-24 marketing year. Exports have increased for all three commodities.
Grain production and exports are expected to drop in 2024-25, coming off record-breaking yields in 2023-24 and a smaller planted area due to a drop in profitability. However, soybean area is expected to expand, and production estimates are higher along with export expectations in 2024-25.
Production, trade
Ukraine is one of the world’s top agricultural producers and exporters, playing a crucial role in supplying grains and oilseeds to the global market. Total grain production in 2023-24 is estimated at 60.1 million tonnes, up from 54.6 million tonnes in the previous marketing year, according to the FAS.
Barley production is estimated at 6.1 million tonnes, similar to 2022-23, while corn is estimated at 31 million tonnes, up from 27 million tonnes, and wheat production is also up from 21.5 million tonnes to 23 million tonnes. Rye production, however, has decreased to 231,000 tonnes from 315,000 tonnes.
Looking ahead to the 2024-25 marketing year, the FAS is predicting production to drop for all four crops, noting that 2023-24 had record-breaking yields. Barley is estimated at 5.7 million tonnes; corn at 26.2 million tonnes; wheat at 22.3 million tonnes; and rye at 200,000 tonnes.
“Grain production in Ukraine has remained unprofitable since Russia’s invasion, and this is expected to translate into decreased grain area for 2024-25,” the FAS said. “With 2024 yields forecast below the previous near-record-breaking 2023, the total grain 2024-25 production volume is forecast to be lower than for the previous marketing year.”
Given their better profitability compared to grains, farmers plan to plant more soybeans and rapeseed in 2024-25, according to the FAS. It estimates sunflower seed production at 11.5 million tonnes, down 4% from the previous marketing year (12 million tonnes), soybean production of 5.1 million tonnes, a 7% increase (4.8 million tonnes), and rapeseed production of 4 million tonnes, similar to last year.
Agricultural products are Ukraine’s most significant exported commodity, accounting for about 41% of the country’s shipments. The EU became the primary market for Ukrainian grains in 2023-24, but Ukrainian exporters are expanding their footprint by reclaiming markets lost due to Russia’s invasion, the FAS said.
Credit: ©SOSLAND PUBLISHING CO.Wheat exports in 2023-24 increased 6% to 18.1 million tonnes and corn exports were up 3% to 28 million tonnes. Barley dropped 9% to 2.5 million tonnes and rye dropped 83% to 3,000 tonnes.
Of note in 2023-24 was a 250% increase in corn exports to Egypt and Turkey, the FAS said. Small batches of corn also started going to India while shipments to the EU and China fell.
Wheat exports to two major destinations, the EU and Egypt, grew and there was also a spike in shipments to several smaller destinations, including Vietnam, Algeria, Lebanon, Israel, Tunisia and South Korea.
“Pakistan became a new destination, importing 814,000 tonnes,” the FAS said. “This expansion became possible predominantly due to a large drop in exports to Turkey, from 3.1 million tonnes to 1.1 million tonnes.”
The FAS said grain exports are expected to ease in 2024-25. Wheat and corn will see the biggest drops with wheat falling 24% to 13.7 million tonnes and corn dropping 22% to 21.8 million tonnes. Barley exports are expected to drop 6% to 2.3 million tonnes, while rye exports will see a 333% increase to 10,000 tonnes. The estimates assume no large changes to the national energy grid and commercial port infrastructure.
“The 2024-25 export forecast drop is the result of decreased production, due to lower areas and climatic conditions, and the inability to dip into large stocks to compensate for decreased production, which was the case in 2022-23 and 2023-24,” the FAS said.
The FAS estimates oilseed exports to increase overall in 2024-25 due to the increased soybean production and decrease crush expected for rapeseed. Sunflower seed exports are estimated at 300,000 tonnes, similar to 2023-24; soybeans at 2.9 million tonnes, up 7%; and rapeseed at 3.6 million tonnes, up 22%.
The EU is expected to remain the main market for Ukrainian oilseeds, although it may not be their final destination.
Flour milling
Ukrainian flour exports in 2023-24 are estimated at 98,200 tonnes, much lower than the 153,900 tonnes exported in 2022-23, according to the Ministry of Agrarian Policy and Food of Ukraine. The IGC estimated in its Oct. 17 Grain Market Report flour exports of 130,000 tonnes for 2024-25.
Flour millers found new markets as the war cut off routes to Southeast Asian and Sub-Saharan African countries. Ghana, Sudan, Gambia and Ethiopia imported only 478 tonnes the whole year and exports to the United Arab Emirates dropped from 27,893 tonnes in 2021 to 683 tonnes in 2023. Other countries such as Somalia, Angola and Djibouti that had imported Ukrainian flour products for many years, imported none in 2023.
At the same time, exports to the EU skyrocketed, accounting for 55% of the volume in 2023, according to the FAS. Neighboring Moldova also took a large portion of the exports, about 15,000 tonnes, along with the Gaza Strip and West Bank (10,000 tonnes) and Israel (5,000 tonnes).
Milling industry experts said overall Ukrainian flour mills shipped products to 217 buyers from 48 countries in 2023.
Ukraine has about 330 flour mills, with flour production in 2023-24 estimated at 2.55 million tonnes, down from 2.615 million tonnes in 2022-23. Domestic consumption has dropped due to the low purchasing power of the population during wartime conditions. Bakeries have switched to simpler recipes, so the range of flour purchased by industrial consumers has narrowed, according to the Union Millers of Ukraine.
