What competition is Ukrainian grain really providing for EU exports in 2013/14?
Of the 3 Black Sea countries Russia, Kazakhstan and Ukraine, the Ukrainian Republic has the greatest export potential. As in the southern parts of Russia, the SE regions were also affected by the high rainfall, but wheat represents only a small part of the cereal crop. The dominant maize areas were still able to convert the rain into yields.
UkrAgroConsult now estimates Ukraine's total harvest somewhat more cautiously at around 58 million tons, which is still a record result. Maize has taken first place in recent years with 25 million tons, while wheat can only just maintain its share. Tilling difficulties (too dry or too wet) in the fall and the high risk of wintering damage of up to 35% make wheat cultivation appear less and less attractive. In the case of maize production, the focus is increasingly on high-performance varieties that promise higher yields. However, the risk of hot and dry continental summers such as in 2009 and 2010 is being accepted.
The high harvest allows large quantities of grain to be exported. In the course of the 2013/14 marketing year, a good 30 million tons are expected, significantly more than the previous 20 to 25 million tons. Despite the attractive export business, the Black Sea region has become very cautious when it comes to exports. Increasing attention is being paid to ensuring that sufficient reserves remain to compensate for the regular crop failures. State export regulations can also be expected this year, the only question is in what form and with what stringency they will be applied.
Together with its neighbors in the Black Sea region, Ukraine is a major competitor to European grain exports. Both regions have their sights set on the importing countries on the North African Mediterranean coast and the Middle East.
However, the competition only revolves around wheat, which the EU has an export surplus of around 25 million tons. In the case of maize, the EU has an import requirement of 6 to 8 million tons, mainly in Spain. In this respect, maize imports from Ukraine are a serious option.
In the case of wheat exports, Ukraine is experiencing quality problems, meaning that European wheat from France has repeatedly been used. Provided that the Ukrainian wheat qualities have not already fallen to feed level, some of the goods are still sufficient for blending.
Conclusion: Despite Ukraine's great export potential, the competitive situation for the EU is not as serious as it appears at first glance.
