Grain Forum & Maritime Days in Odessa - time-tested and true quality

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APK-Inform

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Odessa... The city triggers many associations even to those who have never been there! The famous Deribasivska Street and noisy Pryvoz Market, and the busy port, and quiet sound of the surf with soft sea breeze... But for participants of the grain and marine businesses, Odessa is a meeting place of one of the most significant conference events of the year - the international conference Grain Forum & Maritime Days, organized by APK-Inform Agency, and the International law firm Interlegal. Traditionally, the following companies became partners of the conference: Nortrop, Dealex, Remedy and NTP. Sponsors: Global Logistic Control, LTD VIC Ukrprodexport, GSP, HarvEast, Global Ocean Link, and Group of companies Grain Capital.

 

 

The conference "Grain Forum & Maritime Days - 2016" is quite unique. The organizers gathered at one event all delegates, who are interested in such issues as production and exports of grains, its logistics, legal aspects of trade, etc. For two days, buyers, sellers, logisticians, lawyers, as well as providers of other services for the grain industry had negotiations, discussed recent market trends, features of maritime transport and trading in modern conditions, the prospects of cooperation, and received important information straight from the source.

Except for sessions, presentations, reports and discussions, during four days of the event the participants were able to visit a number of events of both business format, and cultural and entertainment format, and even sporting event!..

In addition, the current year was special, Grain Forum celebrated its 15th anniversary! Over 450 delegates from 27 countries attended the jubilee conference!

 

The session days of Grain Forum & Maritime Days were filled with themes and discussions of various topical issues of the grain market and logistics. The key topics: global trading in terms of crisis in the world economy; influence of military and geopolitical conflicts, and sanctions on trade relations and logistics; tendencies of the Ukrainian and global grain market; development of the port and river infrastructure; marine transportation of grain cargoes. Also, the panel discussions raised the following issues: formation of the joint export consignments of grains at the linear and port elevators: pros and cons; shippers’ criteria of selecting vessels for grain shipment; development of small-scale transshipment in Ukraine, and fumigation of exported grain cargoes.

 

Economy and sales conditions

Grain market, as well as the agro-industrial complex in general, as the integral part of the economy, and it can not develop without reference to the current economic and geopolitical situation. Last year became an absolute proof of the situation. And if three years ago, experts named the weather conditions as the major impact factor while discussing the prospects of the grain market, but now the geopolitical situation and declining growth rates of the world economy have the special effects on trading and market trends. So, during his speech the Executive Director at The Bleyzer Foundation, Oleg Ustenko noted in 2015 the global economic growth will slow down to 3%. The situation will develop mainly due to the slowdown in GDP growth in China and the European Union. Also, the decline of GDP rates in Latin America, especially Brazil, which has been observed for the third year in a row, will still influence at the slowdown of the global economy. However, in terms of the general negative trend, the situation in Ukraine is getting better, according to the expert. In the long term, the growth rates of the Ukrainian economy will possibly reach 7% per year. At the same time, O.Ustenko specified that the Ukrainian economy will fail to realize the potential without the required reforms. In particular, it is necessary to bring business from the shadow, because to date the share of the shadow economy in Ukraine is more than 60%.

 

Speakers paid special attention to the influence of military conflicts on the conditions of doing business, including the grain market. So, the Associated Partner at Interlegal, Natalya Myroshnychenko noted that to date, there are several regions in the world where military conflicts became permanent phenomenons. However, the countries continue trading, purchasing, including food products. At the same time, due to unpredictability of such factor as military conflict, both ship owner and charterer may have losses in terms of unexpected circumstances. Therefore, only thorough preparations for conclusion of the charter (the contract between the shipowner and the charterer to rent a vessel) allow neutralizing most military risks during transportation of agricultural cargoes. According to N.Myroshnychenko, detailed listing of all risks to the contract ensures the safety of the parties in transportation of goods to the countries with a high level of risk of a military conflict.

 

Grain market trends

During 10 recent years, Ukraine significantly strengthened its position on the global grain market, and doubled the volumes of grain production and exports. At the same time, the grain market analyst at APK-Inform Agency, Andrei Kupchenko during his speech noted that the current export season has its specific features, such as those related to the geography of supplies of Ukrainian grains. Analysis of the export geography of basic grains from Ukraine in 2016/17 MY demonstrates that such traditional countries-partners as Egypt and Saudi Arabia reduced the imports of Ukrainian barley by 19% (to 2.3 mln tonnes in July-April of the current MY). In addition, Egypt reduced the imports of corn from Ukraine by 36%, to 1.6 mln tones, he explained. At the same time, A.Kupchenko stressed the urgent need to strengthen the position of Ukraine on the conquered markets of Asia, and expanding of the range of supplied grain varieties.

For example, China, which became the key partner of Ukraine in corn purchases, plans to import 1 mln tonnes of the grain only in 2016/17 MY. While the import volumes of barley will reach 6 mln tonnes, sorghum - 5 mln tonnes, wheat - 3.2 mln tonnes, according to the USDA data, he said. According to A.Kupchenko, Ukraine also needs to develop its relations with Japan, which annually imports 14.5 mln tonnes of corn and 5.7 mln tonnes of wheat.

In turn, the President of Ukrainian Grain Association, Volodymyr Klymenko informed about beginning of the golden age for agricultural development on the Ukrainian grain market. The growth of grain consumption in the world requires the same increase of its production volumes until 2050 by 800 mln tonnes compared with 2015. Ukraine is one of the countries which can ensure the growth of grain production at the expense of realization of its potential. At the same time, V.Klymenko stressed that investors completely believe in the production potential of Ukraine, and that the country will be able to almost double grain production. According to him, in terms of keeping of the planted areas under major grains in Ukraine at the current level, and the following growth of the yield indices, by 2050 the country can increase grain production to 99.1 mln tonnes, including 41.4 mln tonnes of wheat, 43.3 mln tonnes of corn, and 14.4 mln tonnes of barley.

 

Weather factor

In Ukraine, the weather conditions in the spring 2016 provided rather positive impact on the general condition of both winter and spring crops. In particular, precipitations in April-May period provided sufficient reserves of the soil moisture content, declared the Head of Agrometeorology department at Ukrainian Hydrometeorological Center, expert at Regional Environmental Center, Tatyana Adamenko during her speech at the conference.

However, if the precipitations run over time, it would have quite negative effect on crop areas, in particular, winter grains, which are at the stage of milk ripeness in many fields, she said. The expert informed that the thermal resources in the country are changing so fast that it would possibly contribute to significant changes in the structure of crops planted areas. Changes of the thermal resources increase the risk of droughts and heat stresses. In particular, Kherson and Zaporizhia oblasts are gradually transforming into the zone of extremely risky agriculture.

 

Development of infrastructure

One of the conference sessions completely focused on development of the grain market infrastructure. To date, the problems of grain logistics, especially when it comes about the domestic logistics, can become the bottleneck which will considerably slow down the rates of market development. In terms of the current high development potential, good geographical position, the grain market infrastructure requires new investments. However, there are many risks that deter potential investors and reduce the competitiveness of Ukrainian grains on the global market. First of all, as the Agricultural Policy Advisor at the World Bank Group, Oleg Nivievskyi noted, the high cost of port shipment is the main stumbling block to be optimized. According to him, it is necessary to solve three key problems: to optimize port charges, to ensure development of the river logistics (reduced fees, dredging, etc.), and to optimize fumigation and phytosanitary measures. He added that the fumigation market in Ukraine remains uncontrolled, it raises doubts about the quality of works on sanitation of agricultural crops.

For the first time, "Grain Forum & Maritime days” paid attention to the problems of development of navigation on the Danube river, which links Ukraine with Europe. The grain market significantly determines the freight policy of shipowners on the Danube river, declared the Deputy Chairman of the Board on Fleet Operation at PJSC Ukrainian Danube Shipping Company, Vladimir Zaporozhan. He informed that to date, grain crops became the major cargo transported by the Danube river. At the same time, the vessels under the Ukrainian flag can not visit the Romanian ports, because there is a ban for all vessels, except those that are under the Romanian flag or flag of the European Union, said V.Zaporozhan.

Also, the session included presentations of the Chairman of the Board of Directors at U-Port Group, Dmitriy Zhminko, and the Senior project manager at U-Port Group, Yuri Sidorenko on the prospects of development of the port of Ochakov; the Executive Director at UkrTransAgro LLC, Artem Mazny about process optimization and acceleration of transport processing through the case of UkrTransAgro grain terminal (Mariupol); the Co-founder of the project Global Logistic Control, Elena Tkachuk on the European trends for automation of the logistic s processes, and technologies on the Ukrainian logistics market for grain cargoes transportation; the Deputy Head at the State Enterprise Administration of the Sea Ports of Ukraine, Vyacheslav Voronoy on the theme: "Electronic execution of intermodal transportation of export cargoes".

 

Marine transportation

The second half of the second session day focused on the problems of sea shipping, small-scale shipment in Ukraine and the fumigation services market. During his speech, Aleksander Egorov (Marine Engineering Bureau) noted that properly selected vessel is one of the ways to improve the shipment efficiency. In particular, usage of river vessels with the maximum possible sizes allows increasing cargo flows by the navigable rivers in Ukraine.

Also, the experts discussed the issue of transporting of agricultural cargoes at the new Silk Road. Thus, significant reduction of delivery terms of goods is the main advantage of the new route of the Silk Road, declared the representative of Interlegal Georgia, Valerian Imnaishvili. Supplying of agricultural cargoes from China to Georgia takes nearly 11 days, and from China to Ukraine - 11-15 days instead of 45 days by the sea, he explained.

Generally, Ukraine does have the potential to become one of the major agricultural countries, and even head the rating of global exporters of grains and its by-products. However, the authorities and market participants must remember that only joint efforts and normal dialogue will help to rid of problems and make progress.

APK-Inform Agency and Interlegal thank all sponsors, participants, speakers, co-organizers, partners, media partners who assisted in organizing of "Grain Forum & Maritime Days in Odessa 2016”.

See you at the conference "Grain Forum & Maritime Days in Odessa - 2017"!

 

 

 

 

 

 

 

 

 

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