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MHP underlines dryness damage to Ukraine corn prospects

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MHP underlined the weakened prospects for Ukrainian corn, tested by dry weather, as the poultry-to-oilseeds group said that its yields of the grain, and of soybeans and sunflowers, would fall below expectations.

The group said its harvest - covering some 340,000 hectares of land, an area the size of the UK country of Cambridgeshire – had shown "high" yields for early crops, such as wheat and rapeseed.

The wheat result, at 6.0 tonnes per hectare, was well above the Ukraine average of 4.0 tonnes per hectare, if 0.1 tonnes per hectare below the group's result last year.

However, dry weather over the summer, which speeded the wheat harvest, had proved a setback for the group's autumn-harvest crops, as it has done for other growers in Ukraine.

'Yields expected to be lower'

"Unfortunately, due to dry weather conditions during July and August… MHP's corn, sunflower and soybean yields are expected to be lower than forecasted earlier," the group said.

The dryness had affected in particular the 127,000-hectare corn crop which, now 60% completed, was coming in at an average of 7.3 tonnes per hectare, well below the average of 9.3 tonnes per hectare that MHP achieved last year.

The comments represent the latest evidence of the disappoint corn harvest in Ukraine, which has emerged as a major exporter of the grain, ranking behind only the US and Brazil.

Ukraine's farm ministry on Monday pegged this year's harvest at 22.9m tonnes, a 20% slide in output year on year, while many private commentators believe production will end up lower still.

Mykola Gorbachov, vice-president of the Ukrainian Grain Association, told the Amis Food Market Outlook conference on Monday that traders were expecting a harvest of about 21m-22m tonnes.

West vs east

Kernel Holding's harvest results are usually supported by, besides good agronomic techniques, the situation of its farms mainly in central and western areas, where rainfall is typically more reliable than further east.

However, this year, the progress of Ukraine's harvest, which official data show was some 56% complete for corn as of last week, has not shown the usual advantage in western yields, Mr Gorbachov told the conference.

MHP said that its 50,000-hectare sunflower harvest, which was now 98% completed, had shown a yield of 3.2 tonnes per hectare, a relatively small fall from last year's result of 3.4 tonnes per hectare.

For soybeans, cropped over 25,500 hectares, the yield had come in at 1.7 tonnes per hectare, with 2% left to complete, down from 2.1 tonnes per hectare last year.

Poultry volumes

MHP also revealed a 3.8% rise to 150,260 tonnes in sales of poultry in the July-to-September quarter, led by a jump in domestic volumes, with exports falling 22% amid trade curbs between Russia and Ukraine.

The average sales price, in hryvnia terms, rose 25% to 27.62 hryvnia per kilogramme, a reflection of Ukraine's soaring inflation and weak currency.

Sunflower oil sales fell by 4.1% to 71,900 tonnes, at a price of $801 a tonne, down 5.4% year on year "in line with world trends".

MHP depositary receipts, a proxy for shares, stood up 1.0% at $9.70 in lunchtime deals in London.

By Agrimoney.com

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