December is a traditional time for reviewing the accomplishments of the outgoing year and making the first estimates for the coming year.
Dr. Sergey Feofilov, Founder and CEO of UkrAgroConsult, shared his forecast and expectations for the year 2024. We believe that his experience and insights will be of interest to our clients and readers.
What was 2023 like for you and UkrAgroConsult team? How have you been able to keep going through these turbulent times?
Sergey Feofilov: We are all saying goodbye to 2023 now, and no matter what the recent 12 months have been like, we are striving to develop. UkrAgroConsult’s agricultural market analytics was in demand, and our experts shared their expertise preparing non-stop market research, presenting Ukraine agrarian industry outlooks in the European international business forums – starting with Paris in January 2023, following with Milan, Vienna, London, Bucharest, Belgrade, Gdansk and Warsaw, and certainly in Kyiv and other cities of Ukraine. In 2023, UkrAgroConsult became the first Ukrainian company to get membership in the Vienna Agricultural Commodity Exchange. We have been enhancing our analytical product line, the AgriSupp platform and supported Ukrainian healthcare and military institutions by donations.
But the most important development in 2023, according to our analysis, is the growing influence and interaction of Ukrainian agribusiness with EU member states and the countries of the Danube region. This interaction involves the operation of logistics corridors, increased investment in transport routes, and a much better awareness of the need for cooperation among farmers, logisticians, and traders across the region.
Considering the importance of the Danube region in reducing the risks on the global food markets, UkrAgroConsult adds more coverage and analysis of the agri markets of Romania, Bulgaria, Serbia, Hungary and other Balkan countries. Ukrainian agribusiness certainly remains the main focus of our work.
Do you see any changes and new trends in the agricultural data analytics market?
Sergey Feofilov: In 2022, after the outbreak of the war and with the uncertainty of the Black Sea grain share in the global market, there were signs of a decline in the demand for Ukrainian market analytics. However, subsequent events showed that the winners were those market participants who were not in a hurry to exclude Black Sea grain flows from their long-term strategies. In December 2023, global market prices again largely depended on the prospects for production and trade in grain, vegoil and meals from Ukraine.
UkrAgroConsult is also adjusting its business strategy. We are consolidating our position as a regional analytical company and closely monitoring the latest developments and trends in neighboring countries. It is clear that the drivers of growth are constantly changing, and only those agribusinesses that prioritize flexibility in their business processes and are able to quickly adapt their operations to changing environments will be effective.
Do you find your predictions for 2023 correct? What are the main features of the past year and what are the trends for the next year, the year 2024?
Sergey Feofilov: Agricultural markets were particularly uncertain in 2023. Nevertheless, most of the expectations regarding the main trends were realized. Farmers’ own resources remained the main financing option. As we have highlighted in our previous reports and market research, the main impact of limited logistics was a decrease in producers’ margins. As profits fell sharply in 2022 and 2023, the financial reserves from the pre-war 2020-2021 harvests allowed farmers to survive.
A reduction in acreage was also foreseeable due to military operations, limited demand and weak prices. As a result, many market participants were wrong in their yield forecasts. The year was so difficult in terms of access to inputs that it was logical to expect lower production. In the end, however, yields for many major crops were close to record levels. This was due to both weather factors and the efforts of specialists who quickly adapted technologies to meet wartime challenges.
UkrAgroConsult’s May 2023 wheat production forecast of 20-21 M mt stunned the entire market – the market was confident of a crop of 16-17 M mt. In the end, Ukraine produced 22 M mt of wheat. The expected increase in the role of the processing sector also came to fruition. This was particularly evident in the oilseed industry. Never before has the country processed so much rapeseed and soybeans.
In your opinion, what were the key achievements and developments in Ukrainian agriculture in 2023?
Sergey Feofilov: Development of Ukrainian agribusiness is determined by the presence or absence of access to foreign markets. The efficient operation of logistics corridors – both the grain corridor until mid-July and the new humanitarian corridor, which resumed operations in October 2023 – are the drivers that increase the optimism of our forecasts. Investments in new supply chains have also enhanced the role of Danube ports, allowing grain to be exported in transit through the port of Constanta. Efficient maritime and Danube logistics has reduced congestion at both Danube ports and land crossings, opened access to Chinese and other Asian markets, and contributed to higher prices and profits for farmers.
What are the prospects for the grain harvest in 2024?
Sergey Feofilov: The 2024 grain harvest is expected to reach 50-60 M mt, while grain exports are likely to be around 35-40 M mt. The crop structure will be determined by the profitability of a particular crop. Current trends show that priority might be given to oilseeds, with soybeans looking particularly promising, and sugar beet, among other crops.
What do you think the agricultural market is going to be focused on?
Sergey Feofilov: The key issues will be safety, logistics, profitability and international cooperation. I have already mentioned that the war has significantly accelerated the process of Ukraine’s cooperation with EU countries. It will also be extremely important to continue to create mechanisms that will further increase the benefits of cooperation for all parties involved. The Ukrainian land market, which continues to develop despite the war pressure, is also worth mentioning.
What would you wish our readers and yourself for the year 2024?
Sergey Feofilov: I would like to wish everyone resilience, development and growth despite the challenging market and political environment, successful cooperation and sustainable partnership, turning risks into new opportunities, unity for common goals, and most importantly – peace.
For me and UkrAgroConsult, 2024 will be a special year, as our company will mark its 30th anniversary. This is a great achievement for our great team. We continue our business journey, keep opening new markets, growing and staying true to our mission – to counsel the markets that feed the world! Our goal is to provide the world’s leading agribusinesses with high quality, reliable and timely market intelligence to help them make effective business decisions in today’s turbulent environment.
For 2024, we have planned to hold a number of international agri events in the European Union and Ukraine: BLACK SEA GRAIN.EUROPE in Prague in February, BLACK SEA GRAIN.KYIV in Kyiv in April, and WAY FOR GRAIN. Black Sea & Danube in Bucharest in June. We invite all agrarians to work together for the common progress and recovery of Ukraine.
Happy New Year and see you soon!
Best wishes,
Sergey Feofilov