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Ukrainian grain and oilseeds crop sector losses could exceed US$3.2bn this year due to rising logistic costs combined with increased fuel and fertiliser prices, which could lead to reduced planted areas in the next few years, Reuters reported farmers unions as saying.

Although one of the leading global producers and exporters of food with a traditionally profitable agricultural sector, Ukrainian authorities and farmers had not reported financial results in 2022, the 19 October report said.

Prior to the Russian invasion last February, Ukraine had shipped the bulk of its exports through deep-water ports in the Black Sea but they had been fully or partially blocked since the start of the conflict, Reuters wrote.

Limited export opportunities, now centred on the small ports of the Danube River and the railway to Eastern Europe, have multiplied the logistics component and consequently reduced the price traders can offer farmers, according to the report.

The port closures had also led to a sharp rise in the price of imported fuel, seeds, fertilisers and spare parts for agricultural machinery, the report said.

Ukraine’s largest agribusiness the Agrarian Council, was quoted as saying the cost of wheat production in 2023 was about US$146/tonne, with an average selling price of US$102/tonne. Farmers spend US$149/tonne to grow maize which they can sell for US$94/tonne.

According to the Council, even sunflower and rapeseed production would be unprofitable this year and only soyabeans would be profitable for farmers.

Producers said the large losses had already led to reduced plantings for the 2024 crop.

“Farmers will determine the area they can sow based primarily on their financial capacity,” said Oleh Khomenko, the head of Ukrainian Agribusiness Club, a business association.

In addition to financial difficulties, unfavourable weather could significantly reduce the sowing area in Ukraine in the latter part of this year, the report said.

According to state weather forecasts at the time of the report, a prolonged lack of rainfall across most Ukrainian regions had created unfavourable conditions both for the ongoing sowing of winter crops and for plants already sown.

The worst affected areas for soil moisture were in the Odessa, Kherson, Mykolaiv, Kirovohrad, Vinnytsia, Cherkasy and Kharkiv regions where up to 20cm of upper soil layers were completely dry, the forecasters said.

Meanwhile, the sunflowerseed planted area in Ukraine has expanded significantly this year, according to International Grain Council (IGC) data published by Germany’s Union for the Promotion of Oil and Plant Proteins (UFOP) on 12 October.

In addition, sunflowerseed yields in Ukraine were expected to increase compared to 2022 and the IGC projected production to total 15.3M tonnes. This would represent an 8.9% increase compared to the previous year.

Sunflower planted area in the currently “uncontrolled areas” in Ukraine accounted for a significant share in overall output, the report said.

In Russia, where harvesting started at the end of September, sunflowerseed output was expected to remain at the previous year's level of 16.4M tonnes.

Global sunflowerseed production was forecast to total 56.1M tonnes in the 2023/24 marketing year, according to IGC data. This would be 300,000 tonnes lower than the previous month’s forecast.

The reduced forecast was mainly due to a prospective smaller crop in the EU-27, which was expected to total around 10.3M tonnes.