Ukraine rapeseed area set to fall sharply

Dry weather has curbed rapeseed planting in Ukraine, reducing the crop area to about 40 percent less than planned, the country’s agriculture minister Oleksiy Pavlenko said on Tuesday. “The sowing campaign is becoming quite difficult. We’ve had drought in several regions,” he said in an interview at an investment seminar in London organised by the European Bank for Reconstruction and Development.

Ukraine had said it planned to sow 823,000 hectares for the 2016 harvest. For this year’s crop, the harvested area decreased to 685,000 hectares from 865,000 hectares in 2014 due to poor weather during sowing. “On winter wheat we don’t see any problem (with sowing),” Pavlenko said.

The dry weather has also hurt maize (corn) yields for this year’s harvest with production to fall to about 24.5 million tonnes from last season’s 28.5 million, he said. “Our estimate of the final (grains) production, even with all the situation with drought, would be between 58.5 and 60.0 million tonnes,” he said. Last year, Ukraine’s grain production was 64 million tonnes.

Ukraine has been seeking some changes to a $1.5 billion bilateral loan-for-grains deal with China to give it greater flexibility in trading with Beijing. Pavlenko said there were talks about how to create the conditions “to give a second breath to the contract”. The Ukrainian side, which has exported 800,000 tonnes of grain to China so far this year, is now proposing amendments to the 2012 deal to give it the right to sell grain to third parties, if Beijing declines to buy.

It also wants to revise the system under which China can receive a commission for acting as a broker and selling on Ukrainian grain to a third country, Ukraine’s farm ministry said last week. Pavlenko said the sharp decline in the value of Ukraine’s hryvnia currency in the last year has helped those sectors with a strong export focus. Dairy producers, however, who mainly sell to the local market, have been struggling as the devaluation has increased their feed costs.



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