Ukraine position as one of top corn exporters: prospects for 2023/24 are unclear

UkrAgroConsult estimates the 2022 corn harvest at only 26.5 M mt, the lowest for the latest 5 years. For the 2023 harvest, the corn area is expected to keep decreasing due to the highest war risks in about 20% of Ukrainian territory. As of June 1, corn was sown on 3,893 K ha, which is 660 K ha less than last year but exceeds market expectations.

Ukraine was 3rd or 4th in the rating of the main corn exporters until 2022.

High carry-in stocks in the 2021/22 season, favorable weather in the summer of 2022, and the “grain corridor” allowed Ukraine to keep its position as top corn exporter in the 2022/23 season.  As of June 2, the 2022/23 season (September, 2022-May 2023) corn exports from Ukraine amounted to 24.24 M mt (+20% compared to 9 months of the 2021/22 season).

Due to high opening stocks of the 2022/23 season, monthly corn shipments significantly exceeded the average multi-year monthly figures (September 2022- March 2023). In April-May, 2023, corn exports dropped below averages due to limits set by russian delegation in the Joint Coordination Center. Despite these obstacles, monthly exports throughout the season consistently exceeded 2 M mt.

In the 2021/22, China’s share in Ukrainian corn exports reached 24%, but in the current season, it has decreased to 20%. Reduced harvest and logistics disruptions held exporters back from collecting large corn batches for shipment to this faraway market. However, the shares of EU countries have increased (from 44% to 61%) in the first 9 months of the 2022/23 season.

The European Commission anticipates a notable rise in corn production in the EU, reaching 64 M mt, a substantial 23% growth from the 2022/23 season. Imports to the EU are expected to decline by 31% to 17 M mt, which is close to the averages.

Decrease in corn imports from Ukraine is also easily predicted. To this end, a mechanism for implementing partial import restrictions has already been established in the EU countries. The restrictions currently are in force solely to neighboring with Ukraine EU countries.

Against the increasing geopolitical risks, China has decided to diversify its grain imports. China has already started corn imports from Brazil and South Africa. Corn imports from russia has also been allowed, but currently only from regions near the Chinese border. According to TASS, corn exports from Primorsky Krai to China increased by 50% in 2022.

According to USDA, corn imports to China in 2023/24 are projected at 23 M mt, compared to 18 M mt in 2022/23, as domestic consumption for feed purposes increased from 218 M mt up to 223 M mt.

In the upcoming 2023/24 season higher world corn production compared to the previous season is quite predictable, mainly due to the recovery of corn harvests in Argentina and the EU. Import demand for corn by EU countries is expected to decrease, while Ukraine’s export capacities will also be limited.