Ukraine's 2021-22 wheat exports up 28% on year, price downturn continues

Ukraine's wheat exports since the start of marketing year 2021-22 (July-June) through Jan. 17 were 28% higher year on year at 16.3 million mt, agriculture ministry data showed Jan. 20.

Wheat exports from Ukraine have gathered momentum over the past few months, as neighboring Russia increased its export taxes, traders said.

However, the pace has slowed down to some extent, with the ongoing tensions between Russia and Ukraine, traders said.

S&P Global Platts Analytics projected Ukraine to export 22.5 million mt of wheat in MY 2021-22, while the US Department of Agriculture forecast the country's wheat exports at 24.2 million mt in its World Agricultural Supply and Demand Estimates report Jan. 9.

Ukraine had shipped 16.6 million mt of wheat in MY 2020-21.

Farmers in Ukraine planted 6.2 million hectares of winter wheat for MY 2022-23 as of Dec. 30, accounting for nearly 94% of the forecast area of 6.7 million hectares, according to s agriculture ministry data.

Ukraine harvested around 33 million mt of wheat in MY 2021-22, up from 25.4 million mt in MY 2020-21, according to the ministry.

Platts Analytics has projected Ukraine's wheat production at 31.2 million mt for MY 2021-22. The USDA has pegged Ukraine's wheat output for the year at 33 million mt.

Prices soften further

Despite the increase in exports, Ukraine's wheat export prices have shed over 3% during the past fortnight due to ongoing tension at the Ukraine-Russia border. However, prices remained steady since the beginning of the week.

S&P Global Platts assessed FOB prices of 11.5% protein wheat from Ukraine at $319/mt on Jan. 19, steady since Jan. 17.

However, traders expect the demand for Ukraine's wheat to increase in the near term despite the tension as the neighboring country has restructured its export tax mechanisms and introduced an export quota last month.

"Demand for Ukrainian wheat is likely to increase from middle-eastern nations as the supplies from Russia may be limited further," a Kyiv-based trader said.

With Ukraine running a promising export campaign in MY 2021-22, a supply tightness may also boost prices in the near term.

However, with an increase in domestic prices amid rising external demand, Ukraine is mulling a 4 million mt limit on wheat exports January to June to cool off prices.

The government had signed a pact with traders in October to limit wheat exports to 25.3 million mt in MY 2021-22.