The “soybean amendments” came into force from September 1, 2018, entitling solely growers to soybean export VAT refunds. This novelty was aimed at stimulation of domestic processing of the oilseed.
The amendments entailed a decrease in soybean planted area. It has shrunk to 1.6-1.7 Ml ha over the last two years from more than 2 Ml ha in previous record years, UkrAgroConsult reports.
MY 2018/19 witnessed a 40% rise in domestic crush, to a record level, but crushers lost to exporters in MY 2019/20: down 33%, to 1.4 MMT.
MY 2019/20 began with a September record (over 277 KMT), and Ukrainian exports in October hit an all-time high of 565 KMT.
A domestic shortage of soybeans in the latter half of this season and intensifying competition between crushers and exporters drove growth in domestic soybean prices, which have gained 35% since the beginning of MY 2019/20.
The VAT refund restrictions have been removed ahead of the new season – the President of Ukraine signed a corresponding law in May 2020. However, unfortunately, the uncertainty in solving this issue along with spring moisture deficits had already affected the formation of farmers’ preferences with regard to 2020 planting.
So, according to UkrAgroConsult’s current estimates, the planted area in the new season will shrink to 1.65 Ml ha vs. 1.77 Ml ha before and the crop will drop to 4 MMT vs. 4.35 MMT, respectively.
In view of increased appetites of both exporters and crushers, the new season is going to be hot!
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