Known as the granary of Europe and the "bread basket", Ukraine has 25% of the world's black soil resources, 30 million hectares of high-quality farmland, and more than 80 million tons of grain production capacity. Due to its small population and more than 70% of its grain for export, Ukraine has become the third largest exporter of grain, the largest exporter of sunflower oil, the fourth largest exporter of corn, and the fifth largest exporter of wheat after the United States and Russia. export country.
Large grain growers are in a dilemma
. It is now the season of spring plowing and spring sowing. However, due to the outbreak of the Russian-Ukrainian conflict, the bulk grain trade in Ukraine has been suspended, the transportation and sales channels of grain have been cut off, the national infrastructure has been severely damaged, and there is a serious shortage of seeds, fertilizers and agricultural fuel. , coupled with the uncertainty of the prospect of war, Ukrainian large grain farmers have fallen into the dilemma of "dare not to plant", "can't afford to plant" and "can't sell it".
The Ministry of Agricultural Policy and Food of Ukraine lowered the sown area of main crops this year from 16.92 million hectares to 13.44 million hectares. As of April 8, the sown area of 1.07 million hectares has been completed. At present, the progress of spring plowing and spring planting in Ukraine is slow, and most of the major grain growers are in a wait-and-see state, worrying that if the armed conflict does not end in mid-May, Ukraine will miss the planting season.
In Chernihiv Oblast, in northeastern Ukraine, Vasily, 53, runs a small farm of 800 hectares and employs more than 20 workers. Global food prices have risen in the past two years, and the farm operated by Vasily has a good income. In 2021, he bought a freight truck and ordered a 200-horsepower tractor from Belarus. The original plan was to arrive in mid-March this year before the spring ploughing. However, due to the closure of borders between Ukraine and Belarus, the manufacturer has not yet shipped the goods.
Vasily said that many farms are waiting for news of the end of the armed conflict and are not in a hurry to grow food. If the war continues into the second half of the year, and the spring-sown crops cannot be harvested normally and rot in the ground, the losses will be even greater.
Vasily is very pessimistic about the prospects for planting this year. He said that the main concern now is to protect agricultural machinery and retain workers. As for the scale of planting, as long as it is enough to maintain the operation of the farm. Vasily said that local grain growers are discussing reducing the planting of high-fertilizer-input crops such as corn and sunflower this year, and switching to low-fertility crops such as buckwheat and oats.
Maize and wheat production fell sharply
The Ukrainian Ministry of Agriculture lowered its forecast for corn acreage due to the conflict between Russia and Ukraine. The corn planting area in Ukraine in 2022 is expected to be 3.3 million hectares, nearly 40% less than last year. 95% of Ukraine's wheat is winter wheat, which is planted in autumn and harvested in July and August of the following year. The sown area of winter wheat in 2021 is 6.5 million hectares, and the Ukrainian Ministry of Agriculture expects the winter wheat area to be harvested this year to be around 4 million hectares.
Corn and wheat are the two pillars supporting Ukraine's granary, and the production and export of these two crops account for more than 80% of Ukraine's total grain production and export. Taking 2021 as an example, Ukraine's cereal production will reach a record 80.6 million tons, including 32.9 million tons of wheat and 37.1 million tons of corn. Ukraine plans to export about 65 million tons of grains in the 2021-2022 (June/July) marketing year, including 25.3 million tons of wheat and 40 million tons of corn.
It is conservatively estimated that the output of wheat and corn in Ukraine will decrease by more than 40% this year; in 2022, the output of grain in Ukraine will decrease by at least 30%.
Large-scale spring ploughing can only be "wishful thinking."
Ukrainian farmers generally do not have much savings, and grain is their main source of funds. They usually sell the surplus grain of the previous year before spring planting in exchange for money to buy fertilizer and fuel. 70% of Ukraine's agricultural gas diesel is purchased from Belarus and Russia. Since the beginning of March, Ukraine has experienced a nationwide oil shortage, and private oil use has been strictly controlled. In western Ukraine, fuel supply is relatively sufficient, but major oil depots and gas stations still impose restrictions on the purchase of agricultural oil.
Oleg runs a small farm of 300 hectares on the outskirts of Lviv. He said that the price of diesel in Lviv before the war was 28 hryvnia a liter, but now it has risen to 40 to 50 hryvnia a liter, and the purchase limit is 20 liters at a time, "only enough to maintain half a high-power generator. hours of oil".
Without fuel, large-scale spring farming can only be "wishful thinking". In addition, due to the obstruction of overseas supply channels, the existing chemical fertilizer and seed stocks in the Ukrainian domestic market are also seriously lacking.
Ukrainian compound and nitrogen fertilizers are mainly imported from Belarus, partly from Russia. Affected by the war, Wubai has closed the border, trade has been interrupted, and the supply of chemical fertilizers cannot be restored in a short time.
Data show that the price of fertilizers in Ukraine has increased significantly in the past two years. In December 2020, the price of urea in Ukraine was 8,000 hryvnia per ton, and the price of compound fertilizer was 1,100-1,200 hryvnia per ton. By February 2022, the price of urea in the Ukrainian market soared to 32,000 hryvnia per ton. , the price of compound fertilizer rose to 2600 to 2800 hryvnia a ton, up 3 times and 1.5 times respectively.
To make matters worse, Ukrainian farmers are facing greater financial pressure due to the skyrocketing natural gas prices in Europe and the rising prices of urea and other fertilizers.
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