Commodity Shuttle: Russia seizes and destroys agricultural machinery in Ukraine

Russia is attacking Ukraine on one of its strongest economic points: agriculture. Russian troops are seizing and destroying agricultural machinery, fertilizers, seeds and fuel stocks, the country’s producers report to S&P Global Commodity Insights.

The war is dealing a heavy blow to Ukraine’s agricultural sector. Agriculture Minister Roman Leshchenko told Reuters on Tuesday that the country is expected to sow less than half of what it had forecast this spring.

Last year, 15 million hectares were planted, an area that will drop to 7 million this year. Corn, sunflower, barley, soy and sugar beet plantations, important products for domestic industrial processing and exports, will be affected.

Ukrainians are the largest exporters of sunflower oil and rank 3rd in the world for barley and rye. The country also has great importance in corn and wheat exports, occupying the 4th position in the international trade of these cereals.

The war will reduce Ukraine’s share in world trade. According to the Minister of Agriculture, corn planting is expected to be reduced to 3.3 million hectares, well below the 5.4 million in 2021.
Leshchenko told Reuters that 6.5 million hectares of wheat were sown in winter, but only 4 million could be harvested due to the war.

According to S&P, in addition to the spring planting of corn and sunflower being well below last year, productivity will certainly be lower. Winter sowing of wheat and barley will also see yield losses, growers report.

Losing planted area and having reduced productivity, Ukrainians will participate less in the foreign market, since their ports, through which 90% of exported goods leave, had their flow blocked by the war.

In addition to jeopardizing the food security of several countries, commodity prices may remain heated, as Ukrainians are of great importance in the foreign market, according to S&P Global Commodity Insights.

Ukrainian wheat was traded on Friday (18) at US$415 per ton, US$67 more than at the beginning of Russia’s invasion of Ukraine.

This year’s grain production should be far from the 84 million tons of 2021. The same is true of exports, which are also unlikely to reach the 65 million tons initially forecast.

GDP smaller Agricultural growth is expected to be just 1% this year, below previous forecasts of 2.8%. The estimates are from Ipea (Institute of Applied Economic Research).

Soy Take down The downward revision of the GDP occurs due to the 9% reduction in the estimate of soy production. As a result, plant production will be 0.3%, below the previous estimate of 2.6%.

Any less beef Protein production, previously predicted to be growth of 3.6%, should evolve only 3% this year, according to new data from Ipea.

Wheat The use of pesticides in wheat crops increased 19% in the 2021 crop, with sales reaching US$ 268 million, according to a survey by Spark Intelligence Strategic.

Leader For the first time, herbicides were the most sold for this crop, totaling US$ 104 million. This increase is due to the greater adoption of desiccation in the pre-harvest stage by producers.