Sergey Feofilov presented an Outlook on the Black Sea grains market at Australian Grains Industry Conference

GRAIN PRODUCTION is on the rise in the Black Sea and Russia, and  industry specialists on the subject will be sharing their insights into how this is affecting global markets at the Australian Grains Industry Conference (AGIC) 2019.

In a session entitled Shifting Tides, UkrAgroConsult founder and director general Sergey Feofilov looked at some of the ramifications of the changing global grain-trade landscape.

Mr Feofilov established UkrAgroConsult as Ukraine’s first analytical agency specialising in agriculture, and  spoke on the topic of Black Sea Grains: Ambitions and Challenges in Russia and Ukraine.

He said wheat had traditionally been the main crop of Black Sea farmers, but increasing competition within and beyond the region had prompted the need for specialisation.

Recent global figures have already proven the impact of the Black Sea and Russia.

“Ukraine turned into the main corn exporter on the Eurasian continent, even throughout the Eastern Hemisphere,” he said.

“Russia has strengthened its position in the wheat market, pushing the United States out of the top position and becoming the world’s number one wheat exporter in recent years.”

Mr Feofilov said Ukrainian farmers were almost completely self-financed and self-reliant, with a “great deficit” of government support, and this was prompting them to grow crops with improved margins.

“This year, Ukrainian farmers made their decisions realising the after-effects of both bad weather and a reduction of corn area in the US.

“The farmers, encouraged by quite clear market signals, expanded corn area and enjoy currently local favourable weather conditions.”

However, he said profitability and margins in 2019-20 would be affected by the increased global grain production.

“Prices continue to decline and the farmers’ margins of growing all kinds of grains and oil crops will likely decrease compared with last year.”

For Black Sea countries, Mr Feofilov said the profitability of wheat and rapeseed would be down on last season, but higher than that of maize, soybeans and sunflower.

“This season, despite the expected decline in maize profitability and other factors…Ukrainian farmers have decided to expand maize area in 2019.”

UkrAgroConsult