Ukrainian Grain Exports, Production in Focus- as Ukraine Pushes Back Front Line in Black Sea

Simon Constable indicated late last week at The Wall Street Journal Online that, “Russia’s invasion of Ukraine last year sent the price of key grains soaring as investors worried that supplies from the two countries—which before the recent war supplied roughly 30% of wheat exports—would be interrupted.

“Wheat hit a record price of $12.25 a bushel in the aftermath of the February 2022 invasion, though the price has subsequently fallen, recently fetching $5.61, according to FactSet data.

“Corn also jumped during the early months of the war to $8.18 a bushel, close to the record of $8.31 in 2012. It recently traded at $4.75. Prices have fallen back amid recession concerns and because war-related supply problems haven’t been as bad as expected.

“But some strategists predict the downturn could end soon because prices are nearing the production break-even, or the level at which the cost of production equals the revenue for a product. That means if prices fall further, producers will lose money.”

With respect to Ukrainian exports, Reuters writer Pavel Polityuk reported on Monday that, “Ukraine’s grain exports have fallen to 9.8 million metric tons so far in the 2023/24 July-June marketing season, agriculture ministry data showed on Monday.

The ministry said that by Nov. 7 last year, one day later, Ukraine had exported 14.3 million tons of grain.”

The article added that, “The ministry said traders had exported 550,000 tons of grain so far in November compared with 1.07 million tons over Nov. 1-7, 2022.

“The ministry gave no explanation for the drop but traders and farmers’ unions have said blocked Ukrainian Black Sea ports and Russian attacks on the country’s Danube River ports are the main reasons for lower exports.”

Regarding harvest prospects, Reuters News reported on Monday that,

Ukraine has harvested more than 67 million metric tons of grain and oilseeds from the new 2023 harvest so far, the agriculture ministry said on Friday. The ministry gave no comparative data.

“It said 47.2 million tons of grain and about 20 million tons of oilseeds had been threshed. The harvest ends late this year, depending on the weather.”

And Matthew Luxmoore reported in Monday’s Wall Street Journal that, “Moscow said a Ukrainian strike had damaged a Russian ship moored in occupied Crimea, the latest sign that Ukraine’s stepped-up attacks are dealing further blows to the Russian Navy.

“Russia’s statement came after Ukraine’s Air Force on Saturday said it had launched cruise missiles at a shipbuilding facility in Kerch, in east Crimea, that had damaged one of Russia’s most modern cruise missile carriers. The hit to the ship came as Ukraine’s top military commanders describe the battlefield situation as a stalemate.”

The Journal article explained that, “Earlier this year Kyiv stepped up its bombardment of ports in the Crimea peninsula using drones and U.K.-supplied Storm Shadow cruise missiles. Saturday’s attack is the first known time that a Russian cruise missile carrier was hit. But in September, Ukraine hit Russian Navy dry docks in Crimea’s Sevastopol with missiles, damaging a submarine and a large landing ship.”

Luxmoore added that, “Last month, Western officials said Moscow had withdrawn the bulk of its Black Sea Fleet from Crimea and moved powerful vessels including three attack submarines and two frigates to other, more distant ports that offer better protection. Satellite images verified by naval experts confirmed Moscow’s move.

“A Ukrainian military spokeswoman said in October that Ukraine had pushed back the front line in the Black Sea to at least 100 nautical miles from Ukraine’s shorelines.”