According to preliminary estimates, in 2023 in Ukraine, the area sown under grain crops will be reduced by 45% and the grain harvest will be 60% less compared to the pre-war year 2021. The reasons for this reduction are: a decrease in all cultivated areas, a change in the structure of crops and a decrease in the yield of grain crops.
As of December 2022, out of 28.4 million hectares of all cultivated areas in 2021 throughout the territory of the country, 24.6 million hectares (86% of the entire territory) are under the control of Ukraine, of which another 3,8 million hectares cannot be sown due to proximity to the front line, remains of shells, etc.
Reduction in sown area
Sowing of winter crops has already taken place and a significant reduction in the sown area can be observed. 3.8 million hectares of winter grain crops were sown, which is 26% lower compared to the autumn indicator of 2021 in the controlled territories and 43% lower than the sowing in the entire territory of Ukraine. It is worth noting that the north-eastern and central regions have more critically reduced the area of winter wheat.
A significant difference in prices by region
The reason for this trend is a limited export opportunity, expensive logistics and, as a result, a significant difference in prices by region. Regions located territorially close to seaports and borders with the EU have a higher price for agricultural products compared to regions in the north and east of the country. So, in Transcarpathia, the price of 1 ton of corn including VAT is UAH 6,800 ( EUR 174 ) and in Sumy Oblast, it is UAH 4,900 ( EUR 125 ). However, even in the western regions, the price is unprofitable. Therefore, proximity to the border with the EU and working ports determines the ability of the respective regions to continue grain production.
This is the first time that the area sown under oil crops will be larger than under grain.
Given the significant share of logistics in the price of grain crops this year, there will be a decrease in grain crops with a simultaneous increase in oilseed crops. The price of oilseeds is 2 times higher than the price of grain crops on the world market. Therefore, according to preliminary estimates, the sown area under grain crops in 2023 will amount to 8.7 million hectares, which is 22% less than the indicator of 2022 and 45% less than the indicator of 2021. At the same time, the sown area under oil crops is forecast at the level of 9.7 million hectares, which is 32% higher than the figure of 2022 and 9% more than the figure of 2021. This is the first time that the area sown under oil crops will be larger than under grain.
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