Priority for oilseed exports may lead to grain accumulation in Ukraine

Giving priority in export logistics to oilseeds and processed products could lead to further grain accumulation in Ukraine and a drop in farmers’ incomes.

This was reported by Reuters with reference to the All-Ukrainian Agrarian Council.

Earlier, the Ministry of Agrarian Policy supported the proposal of some agricultural associations to give preference to cargoes with higher added value in the event of a shortage of transport capacity.

The AAC believes that oilseeds already have an advantage in exports due to their higher cost, which makes it easier to compensate for expensive logistics routes. For grains, transportation costs make up a much larger share of the final price.

Against the background of limited operation of seaports, Ukraine can currently export slightly more than half of its potential volumes via alternative routes via the Danube and railway.

According to the Ministry of Agrarian Policy, in September, grain exports decreased by more than 60%, while supplies of oilseeds and vegetable oils – by about a third.

The Council warns that additional preferences for oilseeds may lead to filling of granaries, reduction of sales opportunities and further fall in purchase prices. According to the ministry, prices for producers of third-class food wheat have already decreased by almost 30% in the last two months.

Earlier, Ukraine proposed to the EU to create a mechanism to support alternative logistics, since due to restrictions on the work of ports, more than 30 million tons of agricultural products may remain unexported.