Ukraine updates grain harvest outlook to 62 mmt, or 6% yoy drop

Ukraine’s Agrarian Ministry reported on Oct. 26 it sees 62.0 mmt of grain harvested this year, which is a slight upgrade from its earlier expected rangeof 60.2-63.0 mmt. That would be the second-best result in Ukraine’s history after 66.0 mmt harvested last year, according to the ministry’s release. As of Oct. 25, Ukrainian farmers harvested 11.7 mmt of grain (a 3.1% yoy drop) from 85% of total expected area, reporting an average yield of 3.99 t/ha (-5.7% yoy).

The ministry also reported harvesting 10.8 mmt of sunflower seeds as of Oct. 25 (-4.4% yoy) at an average yield of 1.96 t/ha (-9.8% yoy). Harvesting has been completed on 93% of fields sowed with sunflower.
Alexander Paraschiy: Based on interim data, we estimate that Ukraine’s grain harvest will be about 63 mmt (higher than the ministry’s outlook), or 4% less yoy (worse than our previous range of a 3-4% drop). The sunflower harvest will be 10% lower than in 2016.

So despite the near-record numbers, Ukraine’s farming sector will ultimately contribute negatively to Ukraine’s 2017 GDP growth result. We keep our 2017 real GDP outlook unchanged at 1.9% growth, as we see the underperformance of farming and manufacturing to be compensated by better results from services.