Ukraine to harvest 20% less yoy in 2012

Ukraine’s Ministry of Agrarian Policy expects Ukraine will harvest 45.3 mmt of crops this year, 20% below the 2011 figure (56.7 mmt). Adverse weather conditions both last winter and this summer are the key reasons for the decrease. According to yesterday’s data, yields for already harvested early crops (mostly in southern regions that suffered the most from adverse weather) fell 31% yoy, on average. According to recent harvest statistics, yields declined 34% yoy (to 2.12 t/ha) for wheat and 42% yoy (to 1.71 t/ha) for barley, while yields for rapeseed grew 70% yoy to 1.96 t/ha.

Alexander Paraschiy: The indicated harvest guidance is in the lower band of a 45-47 mmt range previously provided by the ministry. The expected decline in the harvest (and this is not the end – a 25% yoy decline should not be ruled out) may have a negative implication for Ukraine’s 2012 balance of payments (as agro products are the second largest export item) and inflation (food accounts for half of Ukraine’s consumer basket). The main losers from this season’s adverse weather among listed agro producers could be those focused in southern and southeastern regions: Sintal Agriculture (SNPS GF), KSG Agro (KSG PW) and Agroton (AGT PW).