Major Ukraine farm operators are announcing strong yield
results from their grains harvest despite the country's political and economic
unrest – but it is unclear yet whether they are falling foul of quality
concerns besetting the crop.
Trigon Agri, the Stockholm-listed farm operator, said that it
had achieved "strong yields" in both its Russian business and the Ukraine
division which accounts for the bulk of its cropping land.
At its biggest Ukraine farming centre, in Kharkov, the
winter wheat yield had risen by 19% to 5.61 tonnes per hectare, a level which
the group said "exceeds the national average by 50%".
While acknowledging that 2014 has been "incredibly challenging",
thanks to Ukraine unrest and falling crop prices, Trigon Agri said it was "confident
of a very much better financial performance" because of the "very promising
outlook" from its rapeseed and wheat harvests.
The group attributed the better yield result to factors
including favourable weather and "good relationship management" with trading
houses, which "allowed forward sales at attractive price levels to be effected".
The comments came hours after silos-to-sunflowers group Kernel
Holding, which farms on some 370,000 hectares, said that it had completed its
winter wheat harvest at a yield also of 5.6 tonnes per hectare, a rise of 23%
year on year.
Last week Agrokultura, listed in Stockholm, said that its winter
barley harvest was finishing with yields up 49% at 5.5 tonnes per hectare,
while the rapeseed harvest, then 27% completed, was showing a result above last
year's 2.9 tonnes per hectare.
"Weather conditions in Ukraine have been excellent with
yields recorded so far being higher than at any time in the history of the company,"
the group said.
Three weeks ago, poultry-to-sunflower oil group MHP said it
expected yields its Ukraine grain-growing operations, on 290,000 hectares, were
poised for "good" yields "significantly higher than Ukraine's average.
MHP cited "favourable weather conditions in Ukraine,
operational efficiency and employment of best practice".
Quantity and quality
The comments tally with improved ideas for Ukraine grains
production, which UkrAgroConsult last
week estimated at 57.4m tonnes, an upgrade of 2.1m tonnes, and in line with the
2013 result, on its figures.
However, the Ukraine wheat harvest, like that in
neighbouring European Union, is expected to show an increased proportion of
feed wheat, thanks to harvest time rains which, on ripe kernels, encourage sprouting
and reduce milling characteristics.
ProAgro on Tuesday estimated the wheat crop at 35% of feed
quality only, up from 25-30% last year.
Today, Ukraine's farm ministry estimated the share of
milling wheat in the wheat harvest at 75% in southern regions, but only 45-50%
in central and western areas.
The ministry said that, as of Tuesday, farmed had harvested
8.8m hectares, reaping 31.2m tonnes of grain by bunker weight.
'Period of active
One setback Agrokultura acknowledged from the Ukraine crisis
was on wage pressures, with soaring inflation, stoked by depreciation of the hryvnia,
encouraging requests for pay rises.
"Wage pressure in hryvnias is high, and we are monitoring the
market and what other companies are doing," the group said.
Nonetheless, although "we will have to increase wages, we
expected that in dollar terms" wages will prove lower than before the currency
MHP on Tuesday also announced the temporary closure of a poultry
plant in Donetsk because of the threat of violence against its staff.
"Due to the period of active hostilities at the town of
Shahtarsk, Shahtarska Nova poultry farm had to temporarily suspend its
operations as of August 1 for the sake of its employees' safety," MHP said,
adding that it would now be forced to import some hatching eggs from the