The 2023/24 season is shaping up to be a transformative period for Ukraine's agriculture. With challenges stemming from global events and economic shifts, there's a push for industry players to think outside the box, strategize effectively, and respond swiftly. Specialists are already tapping into the potential this season holds and eyeing projects that might be game-changers in the years to come.
To stay updated on market news where BDO in Ukraine is involved, we always aim to get an insider's perspective on the major events. That's why our colleague from the audit department attended the “Black Sea Grain & Oil-2023” Conference, where the pivotal aspects of Ukraine's agricultural sector development were discussed.
The conference aimed to streamline collaboration across the entire food supply chain to drive mutual success and growth.
This year's event was quite the standout. Drawing attendees from across the agri-food landscape, it served as a prime hotspot for idea exchange and insights. Those present got to delve into insights from industry leaders and partake in forward-thinking discussions about the grain and oilseed markets. The enthusiasm of the big hitters was palpable, with many already scouting for fresh collaborative ventures.
So, what was discussed at “Black Sea Grain & Oil-2023”?
- Changes in the distribution markets of Ukrainian agri-products and forecasts for the development of the grain and oilseed sectors.
- The transformation of logistics in Ukraine: export routes and what's on the horizon for the sector leading up to 2025.
- What's on the horizon for Ukraine's agri-business sector: challenges and ways to navigate them.
- Innovations in the agri-sector: what's new?
- Support programs available to Ukrainian farmers.
- Anticipating investments for Ukraine's post-war rebuild.
Below are some intriguing insights from the conference's speakers.
- Ukrainian Danube Shipping Company PJSC is looking to significantly increase the loading of maritime vessels in Romania's Constanta port. Traders currently face major challenges in the market. Thus, even with a record harvest, farmers are at risk of incurring losses, primarily due to logistics issues. However, there isn't a better alternative than the Danube ports, which can export at least 5 million tons of agricultural produce monthly.
On average, UDSC loads two large maritime vessels, but with infrastructure enhancements — additional cranes and new anchorages — this can increase by up to 50%. The organization is also actively implementing investment projects, reviving its marine fleet, and constructing a new stevedoring complex for its service.
- Presently, sunflower exports have “almost dwindled to nothing”. However, after lifting restrictions by five countries, including Bulgaria, it is expected to rebound — competition should halt the falling prices. Yet, without deepwater ports, oil product exports remain complicated.
- A rise in rapeseed prices is anticipated, correlating with increasing oil prices. What does this indicate? When oil prices surge by approximately $10, oil prices instantaneously jump by $30-$60. This is because palm oils are used for biodiesel, which is currently in high demand globally.
- Grain producers currently have two sales strategies. Half intend to sell their produce as soon as possible, while the rest are holding off in hopes of a price increase. Both approaches demand prior sale preparations and keep in touch with potential buyers. The real challenge for Ukrainian farmers is preparedness for any scenario, which becomes their strategy amid uncertainty.
- Ascet Shipping Company has considerably expanded its monthly grain handling capacity in the Danube ports, increasing it from 30,000 tons to 100,000 tons. This was shared by the company's CEO, Mykola Gapeyev. Currently, the company is actively investing in alternative export routes and broadening logistics chains for grain transportation, having lost 90% of its capacities due to the war. He also highlighted that there are no “right” decisions in grain logistics at the moment; what seems appropriate today can change in just a few weeks.
- As of today, according to experts, Ukraine faces challenges in the European feed wheat market. The situation is that the country lags behind Brazil in this segment. Market analysis shows a need to refine strategies and enhance the competitiveness of Ukrainian feed wheat suppliers to Europe. Experts advise ramping up efforts to improve positions and increase the export volumes of this strategically essential agricultural product.
In Focus: How can BDO in Ukraine be useful for agricultural companies?
Overall, the “Black Sea Grain & Oil-2023” Conference was a captivating event, highlighting the strong interest and engagement in the agricultural sector. This event presented an incredible opportunity for professionals and experts from various branches of the agri-food sector to exchange ideas, share experiences, and discuss prospects.
The BDO in Ukraine team appreciates the chance to be a part of it and is all in for partnering up to support further growth and innovation in this key sector for Ukraine.