Changes in domestic Ukrainian tax policy are expected to result in lower soyabean plantings in the 2018/19 season, while sunflower and rapeseed hectarage is projected to grow.

According to a 16 May US Department of Agriculture (USDA) GAIN report, the tax policy changes would make it less profitable for farmers to produce soyabeans, which would result in a soyabean planted area of 1.5M ha, 23% less than in 2017/18.

Meanwhile, soyabean production was expected to dip 14% to 3.3M tonnes, despite an expected higher yield per hectare than the five-year average.

“Production of genetically engineered crops in Ukraine is still not legally allowed since none have passed the official registration and approval process. However, industry rumours indicate that Roundup Ready soyabeans continue to be produced in the country,” the USDA said.

Soyabean exports – traditionally eating up half of Ukraine’s soyabean production – were expected to fall 34% to 1.6M tonnes from 2.5M tonnes from 2017/18 due to lower profitability resulting from the tax changes.

The planted areas for sunflower and rapeseed were projected to increase in 2018/19, partly at the expense of the lower soyabean area.

While giving no prediction of sunflower planted area in 2018/19, the USDA noted that the area increased from 5.1M ha to 6.1M ha in 2016/17 due to a higher profitability of the crop and that the trend was expected to continue this year.

“Production of sunflower seed in Ukraine for 2018/19 is forecast to reach 15.6M tonnes, 16% higher compared to the estimated 13.5M tonnes for 2017/18,” the report read.

Based on domestic reports, Ukrainian farmers had already planted 1.01M ha of rapeseed by May, marking a 12% increase in planted area over the last seasons.

With favourable weather conditions likely to result in low winterkill rates, rapeseed production was forecast to surpass 2.6M tonnes, an increase of 21% compared to the 2.2M tonnes produced in 2017/18.