Oil production is growing rapidly with the start of the “big milk” season.

 

 

At the same time, due to falling prices, there are big problems with its export, Infagro reports.

 

 

“While processors are deciding how to use the growing supply of raw milk, oil prices continue to decline. Taking into account global market trends, Ukrainian producers will also have to reduce prices, ”analysts say.

 

 

Oil is exported mainly to Azerbaijan (24%), Georgia (22%), Armenia (14%) and Moldova (12%). 63% of the export volume of goods is provided by 5 companies.

 

 

“Imports in the first quarter of the year were only slightly less than exports. 2.5 thousand tons of butter and 300 tons of milk fat were brought into the country, ”summed up Infagro.

The volume of grain exports from Ukraine since the beginning of 2019/20 MY as of April 17, 2020 amounted to more than 48.66 million tons, which is 8.4 million tons (or 21%) higher than last year (40.2 million t).

 

 

This is evidenced by the data of the State Fiscal Service, the Information and Analytical Portal of the Agro-Industrial Complex of Ukraine says.

 

 

Thus, almost 18.5 million tons of wheat have been exported since the beginning of the season, which is 4.5 million tons or 32.3% higher than last year.

 

 

Barley supplies to foreign markets exceeded 4.5 million tons (+ 34.3%). Export of rye amounted to 8.2 thousand tons against 88.2 thousand tons at the same date last year.

 

 

Export of corn to foreign markets during the reporting period amounted to almost 25 million tons (+ 12.8%).

 

 

At the same time, the export of Ukrainian flour reached almost 288 thousand tons, which is 28.3% more than a year earlier.

A rather difficult situation has developed in the Ukrainian dairy market and it will be like that for a long time to come.

 

 

The forecast was made by Infagro analysts.

 

 

“This year, big problems will be not only for the processors, as it was until now, but also for the producers of raw materials. Until recently, the profitability of milk production in the country was quite high. But in the second quarter, some dairy farmers may even have to work without profit. Prices for raw milk are declining, and the cost of its production is growing (feed prices have risen). After a long period of excellent earnings, it’s hard to come to terms with it, ”experts say.

 

 

Now in the Ukrainian dairy market the following occurs:

 

 

1. The supply of raw materials is growing due to milk produced in households. At the same time, purchase prices decreased, but not so much as to mass-produce products for export.

 

2. After a substantial revitalization of sales in March, domestic demand for almost all dairy products decreased markedly. It should be noted that a drop in demand would be more significant if hundreds of thousands of labor migrants did not return from Europe to Ukraine, increasing the number of potential consumers.

 

3. Closed sales channels of HoReCa and markets undermined the business of a number of operators that had established sales channels for these categories of consumers.

 

4. Due to the recession of world markets, the prices of external demand for export-oriented goods have fallen. Foreign sales are now breakeven mainly only for deliveries to post-Soviet countries, and then not for all goods.

 

5. Despite the March devaluation of the hryvnia, imports of dairy products continue to increase. In the first quarter of this year, the import of most commodity items is many times higher than in 2019.

The US Department of Agriculture (USDA) believes that the export of Ukrainian chicken in 2020 will amount to 400 thousand tons, which is 50 thousand tons less than forecast at the beginning of the year.

 

 

In April, the forecast for world meat production and sales in 2020 was updated. So, Brazil and the United States, as before, will be the main exporters of poultry meat, together they will occupy 60% of the world market, the EU will take third place in terms of foreign sales this year, Thailand will take fourth place, and China and Turkey are fifth. , – Ukraine.

 

 

According to ProAgro Group, American analysts believe, in particular, that global poultry meat production will be 2% lower than previously forecast and will amount to 100.5 million tons. However, this is 1% more than was produced in 2019.

 

 

The volume of world trade in chicken will be 4% less than previously predicted and will amount to 11.7 million tons. This is 1% less than it was sold in 2019.

Japan, Oman, China and South Korea still hold a ban on the import of Ukrainian chicken, which was introduced due to the case of bird flu in the Vinnitsa region.

 

 

This was reported by the acting Head of the State Food and Beverage Service Olga Shevchenko, writes UNIAN.

 

 

“The ban on the import of chicken from the territory of the Vinnitsa region has not yet been lifted by Hong Kong, Kuwait and Kazakhstan. At the same time, Japan, Oman, China and South Korea continue the ban on trade with the whole country, ”Olga Shevchenko said.

 

 

According to her, the European Union, Moldova and the United Arab Emirates allowed the import of poultry from all over Ukraine, except for the 10-kilometer zone around the source of the outbreak – the Khutor agricultural enterprise in the Nemirovsky district of Vinnitsa region. The source of the disease is completely eliminated.

 

 

“The local administration announced the end of quarantine for bird flu in the Vinnitsa region on March 14th. However, according to international rules, the territory of Ukraine will be considered free of bird flu from May 14, therefore, import restrictions for a number of countries are still in force, ”Olga Shevchenko explained.

In January-March 2020, Ukraine increased the sale of meat in live weight to 853 thousand tons – by 2.9% compared to the same period of the previous year (828.7 thousand tons).

 

 

This is evidenced by the data of the State Statistics Service.

 

 

According to the data, in the reporting period, livestock enterprises in Ukraine produced for the slaughter of farm animals with a total weight of 572 thousand tons, which is 6.3% more than was produced in the same period last year (538.6 thousand tons).

 

 

In particular, on household farms, 280.7 thousand tons of meat were sold for slaughter of animal meat, which is 3.2% less than in January-March last year (290.1 ​​thousand tons).

Ukrainian producers of meat and meat products have reduced prices for products in the domestic market.

 

This is demonstrated by data from the State Statistics Service.

 

 

In the first quarter of 2020, domestic producers reduced the cost of meat and meat products sold within Ukraine by 1.9% compared with the previous quarter.

 

 

But at the same time, producers increased prices by 0.6% for meat and meat products that are exported outside of Ukraine.

 

 

For clarity, milk producers increased prices for products – by 2%, manufacturers of bread, bakery and flour products – by 0.8%, sugar producers – by 2.7%.

 

 

According to customs statistics for the first quarter of 2020, Ukraine imported 2.5 thousand tons of fresh, chilled and frozen pork. This is almost three times less than the volume of receipt of such raw materials in the corresponding period last year.

In the short term, a shortage of a healthy work force is expected, a violation in the supply chain due to a shortage of labor, restrictions on the movement of goods by appropriate means of transport should be expected. Prices for products will decrease, and prices for certain types of resources may rise due to lack of resources. Companies are projected to reduce revenue.

 

 

This was told by lawyer Julia Kurilo. The quarantine is recognized as force majeure – these are extraordinary and inevitable circumstances, it is objectively impossible to fulfill the obligations stipulated by the terms of the contract. Force majeure excludes liability for default, with the exception of Art. 625 GK.

 

 

The legal signs of force majeure are as follows: they are not predictable at the time of the conclusion of the contract, are directly related to the impossibility of the contract, irreversible (including consequences) and exceptional (that is, beyond the will of the parties).

 

 

If the company cannot fulfill its obligations due to quarantine, the lawyer advises you to pay attention to the content of the contract and comply with the stipulated notification procedure.

 

 

Be sure to fix the date the force majeure begins.

 

 

“Document all circumstances affecting the ability to execute the contract. Collect documents from third parties in order to confirm the inevitability, exclusivity, unpredictability of circumstances, and causality, ”advises Kurilo.

 

 

After the completion of force majeure, you need to contact the appropriate Chamber of Commerce.

From now on, Ukrainian producers of thermally processed products from poultry, pork and eggs will be able to obtain permits for exporting products to the market of the Republic of Singapore. The decision was taken by the Singapore State Food Agency.

 

 

This was reported by the press service of the Ministry of Foreign Affairs of Ukraine.

 

 

“Any crises also bring new opportunities. The access of Ukrainian goods to the Singapore market will help our entrepreneurs increase exports despite the coronavirus crisis, ”said Dmitry Kuleba, Foreign Minister. According to him, global markets and supply chains of goods are currently being transformed due to a pandemic, and Ukraine is able to use the changes to its advantage.

 

 

First of all, revealing the hidden potential of exports to the markets of Asian countries.

 

 

Detailed explanations of the terms of export to Singapore can be obtained from the State Service of Ukraine for Food Safety and Consumer Protection.

 

 

Note that Ukrainian exporters are ready to take advantage of new opportunities, should fill out a questionnaire for a Ukrainian exporter from the Embassy of Ukraine in the Republic of Singapore (applies only to the export of Ukrainian goods to the markets of ASEAN countries: Brunei, Vietnam, Indonesia, Cambodia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand).

 

 

“The Foreign Ministry of Ukraine, together with domestic exporters, will continue to open up new opportunities for Ukrainian goods on the markets of Singapore and ASEAN countries,” Kuleba said.

According to Reuters, Egyptian authorities are discussing the possibility of changing the terms of international tenders for the purchase of wheat. Suppliers will have to offer prices not on the basis of FOB, as it is now (and a separate tender for freight rates), but immediately on the basis of C & F, ProAgro Group reports with reference to agrotimes.ua.

 

 

The state agency GASC is also considering the possibility of paying for grain at the next international tender with letters of credit with immediate payment upon presentation of the relevant documents for shipment instead of the deferred payments currently in force.

 

 

It is anticipated that payment of letters of credit should be made through Islamic Trade Finance Corporation.

 

 

In addition, GASC, for the purpose of control, will invite suppliers to disclose price estimates by providing data on FOB prices and sea freight rates.

 

 

Last week, the GASC announced a tender for the purchase of wheat and immediately canceled it because of the disagreement of the participants with the new tough conditions.