Agrarian associations and the Ministry of Agrarian Policy are in discussions to reintroduce the Memorandum on grain export, aiming to ensure market stability amidst expected production declines.
Discussions Underway for Memorandum Renewal
The head of the Boroshnomela State Council of Ukraine, R. Rybchynskyi, announced at the Agro Ukraine Summit that specialized agrarian associations, along with the Ministry of Agricultural Policy, are discussing the reintroduction of the Memorandum on grain export. This practice, which has been dormant in recent years, is being reconsidered to stabilize the domestic market.
Ensuring Market Stability
Acting Minister of Agricultural Policy, T. Vysotskyi, recently highlighted the necessity of the Memorandum at the “Bread Industry 2024″ conference. He stated that although current transitional stocks are sufficient, a decrease in wheat production is anticipated in the new season. The Memorandum is seen as a vital tool to ensure that domestic processors have predictable access to quality raw materials throughout the year.
“Currently, we have sufficient transitional stocks, but we expect a decrease in wheat production in the new season. The volumes of grain will be sufficient to satisfy domestic consumption, but processors must obtain predictability for a year in order to be sure of the constant availability of quality raw materials,” Vysotskyi said.
Timing and Importance of the Memorandum
Traditionally, the Memorandum with producers and processors was signed in August or September, once the volume and quality of the wheat harvest were known. B. Shestopalov, co-owner and managing partner of the HD-group holding, stressed the importance of state involvement in export issues. He emphasized the need for clarity on how domestic processors will be supplied with raw materials, the quantities that will be exported, and the prices of grain and its processed products.
Forecasted Wheat Production and Export
- The Ministry of Agricultural Policy projects the wheat harvest in Ukraine for the 2024/25 marketing year at 19.2 million tons, down from 22.2 million tons in the 2023/24 marketing year.
- The USDA’s May estimate for the 2024/25 harvest stands slightly higher at 21 million tons.
- Additionally, the Ukrainian Grain Association forecasts initial wheat stocks at 2.4 million tons and has reduced its wheat production estimate by 0.9 million tons to 19.1 million tons, with exports expected to reach 13 million tons, down from 17 million tons in the previous season.
- The USDA, however, estimates exports at 14 million tons.
The reintroduction of the Memorandum on grain export reflects a strategic move by Ukraine to navigate the challenges posed by an anticipated decline in wheat production. By ensuring predictable access to raw materials for domestic processors, the Ministry of Agricultural Policy aims to maintain market stability and protect the interests of local producers and processors. This proactive approach underscores the importance of collaborative efforts between agrarian associations and the government to secure the future of Ukraine’s agricultural sector.