Ukraine: Total grain harvest to be reduced three times in 2023

Problems with logistics and power supply during the export of agricultural products from Ukraine during the war make the cultivation of grain crops unprofitable, therefore, in 2023, the total harvest in the country will be reduced three times compared to the record pre-war level, to 40 million tonnes from almost 120 million tonnes, Interfax-Ukraine reported on December 27.

Reducing the harvest to such low rates is already inevitable due to the current economic situation in the country, but by financing the agricultural sector, Ukraine can achieve a crop growth of up to 70 million tonnes by 2024, Rafael Goroyan, owner of the Prometey grain trading holding, said in an interview with Interfax-Ukraine.

"Last year, 120 million tonnes of grain and oilseeds were harvested, this year they have already fallen to 60 million tonnes, and next year, according to my forecasts, there will be 40 million tonnes, that is, a drop of 300%! At the same time, the entire infrastructure of Ukraine is tailored for a harvest of 120 million tonnes and even more, this is what we have achieved in 30 years of independence. The entire infrastructure is designed for 120 million tonnes – cars, wagons, stations, ports, elevators – but there will be no goods!" the head of Prometey said in the interview.

"There will be a very sharp shortage of wheat, barley and corn. There will be enough sunflower and soybeans, these are high-margin crops, and corn will not be sown. Now it is expensive to dry, this year's harvest cannot be harvested, it cannot be exported – and then, when we win the war (and I think it will happen very soon), the ports will open, the light will appear, and we will get a shortage of products," he added.

According to Goroyan, the reduction in the grain harvest will lead to a collapse in the value of infrastructure assets in Ukraine, such as ports, elevators and vehicles, as well as a sharp increase in world prices for wheat, corn and barley. In this sense, the reduction in the wheat harvest is especially serious, since this is a "politicized" crop associated with world food security, the shortage of which will lead to an increase in its quotations on the main world exchanges.

Thus, the state should urgently start issuing loans to farmers under state guarantees in order to prevent stagnation in the gross harvest for several years after 2023. This will allow Ukraine, with a relatively small investment, to avoid a reduction in the harvest and the associated decline in the farming and grain trading industries, as well as the bankruptcy of logistics and infrastructure companies.

"This is necessary so that we do not see a sharp drop in exports in two years, and we will most likely see it. Then there will be no agricultural sector in the country, the country will be without foreign currency, we will face serious unemployment, high inflation and everything will go wrong. I believe that urgent government subsidies are needed for agricultural producers, very urgently, literally for yesterday. And this should be done lightly, without complex formalities, because the average and small Ukrainian farmer does not like to formalize anything," Goroyan emphasized in the interview.

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