Ukraine maize crop outlook cut as crisis takes toll

Kiev | Reuters — Crisis-hit Ukraine’s maize crop is expected to slump almost 20 per cent this year, a Reuters poll showed Wednesday, as farmers from the major global exporter feel the impact of reduced financing.

As Ukraine teeters on the brink of dismemberment, the crisis has toughened lending conditions and some farmers have been forced to use cheaper seed or cut the amount of fertiliser they can purchase.

Others have struggled to secure loans to replace old equipment.

A survey of 11 traders and analysts produced a median forecast of 25 million tonnes for this year’s maize crop, down 19.1 per cent from last year’s record 30.9 million.

The crop would still, however, be the second largest on record and more than double the 11.9 million produced just four years ago.

The survey gave a median estimate for harvested area of 4.7 million hectares, down less than three per cent from the prior season’s 4.825 million, while yield was expected to fall more sharply by 14 per cent to 5.5 tonnes per hectare.

“The yield could fall because of a lack of funds,” an international trader working in Ukraine said.

Last year’s record yield of 6.4 tonnes per hectare was also boosted by near-ideal weather, while conditions this year appear not quite as favourable.

“Last year’s weather conditions were perfect while this year they are just good,” one analyst said.

The International Grains Council in late April forecast Ukraine’s maize crop would total 26.8 million tonnes. The U.S. Department of Agriculture is due to issue its first crop projection on Friday.

Farmers were hoping for help from the International Monetary Fund as the toughened lending conditions hit hard during the key spring sowing campaign.

“Once aid comes and the banking sector stabilizes, the agriculture sector will be the first to receive financing because it’s showing sustainable growth,” said Elena Voloshina, head of the International Finance Corporation — the World Bank’s private-sector financing arm — in Ukraine.

The country’s central bank said on Wednesday that Ukraine had received a first tranche worth about US$3.2 billion from a $17 billion two-year aid programme from the IMF.

— Pavel Polityuk is a Reuters correspondent covering the commodities sector from Kiev. Additional reporting for Reuters by Gus Trompiz and Valerie Parent in Paris and Sarah McFarlane in London.