The soybean market segment in Ukraine remains as one of the most prospective and dynamically developing ones. During several recent years, the market continues demonstrating stable increasing of the production volumes, high export demand, and the growth of oilseed processing capacities. So, what is marginality of Ukrainian soybeans: either its processing or exports? Market participants often disagree on the issue. At the present stage, soybean export volumes exceed the processing volumes. But at the same time, the oilseed processing market does not stand still, and demonstrates increasing of it crushing capacities from year to year. Another rather pressing question for the oilseed producers and customers – qualitative indices of soybeans produced in Ukraine (GM and non-GM soy, protein content, etc.).
Within frames of the fourth international conference "Marginality of Ukrainian soybeans: processing and exports?!" (June 16-17, Kiev), organized by APK-Inform Agency, representatives of all segments of the soybean industry managed to meet not only to sum up the preliminary results of the ending season, but also to discuss topical issues for the soybean business.
One of the leaders of soybean processing volumes in Ukraine, the agro-industrial holding Astarta–Kyiv, became the General sponsor of the event. Also, the companies Farmet and MyAnde were the sponsors of the conference.
More than 140 participants representing nearly 90 companies and organizations from 12 countries gathered in the capital of Ukraine to discuss the current situation on the Ukrainian and global markets of soybeans, price trends of the season-2016/17, and short-term forecasts of the situation development in the market segment, ways to improve the efficiency of soybean growing, features of deep processing of oilseeds in Ukraine, and many other topical issues and problems of the soybean complex in the country.
The list of conference participants included soybeans producers and crushers, trading companies, logistics and brokerage companies, specialists on estimating the quality of oilseed raw materials and by-products, etc.
Almost all presentations by speakers caused genuine interest and lively discussion among the participants.
The President of the Ukrainian association of soybean producers and processors, Victor Tymchenko began the conference with his report. He noted that during 13 recent years, Ukraine significantly increased its soybean production volumes to 3.93 mln tonnes in 2015, as opposed to 232 thsd tonnes in 2003. Ukraine managed to achieve the reporting indicator by expanding the planted areas under the oilseed, which increased from 189.6 thsd ha in 2003 to 2.14 mln ha in 2015, as well as the increase of its yield in 1 5 times, to 1.84 t/ha. Also, V.Tymchenko said that in the period of 2005-2015, the number of Ukrainian companies engaged in soybeans cultivation, grew in 2.8 times, from 3`768 to 10`457, and the number of companies-processors of the oilseed – up 3 times, from 30 to 90. Soybean processing capacities increased in 2.5 times - from 800 thsd tonnes to 2 mln tonnes. As for the prospects of further development of soybean production in Ukraine, V.Tymchenko expects for continuation of the current growth rates. Thus, by 2020 the planted areas under soybeans in the country will reach 2.35 mln ha, and the yield will increase to 2.2 t/ha. Therefore, in 2020 Ukraine will be able to harvest of 5.17 mln tonnes of soybeans.
Also, the presentation of the General Director at the Association Ukroliyaprom, Stepan Kapshuk was informative as usual. According to the speaker, In 2016/17 MY, the harvest volumes of soybeans in Ukraine will increase to 4.2 mln tonnes, against 3.92 mln tonnes in the current season, while the export volumes of the oilseed will remain unchanged and total 2.4 mln tonnes. So, during the first 9 months of 2015/16 MY (September-May) Ukraine already exported 118.2 thsd tonnes of soybean oil at the sum of 81.5 mln USD. In the reporting period, China and Poland were the main buyers of Ukrainian soybean oil, which purchased 58.6% and 29.3% of the general shipments of the commodity respectively, said S.Kapshuk. As for the exports of Ukrainian soybean meal, in the reporting period the index reached 250 thsd tonnes at the sum of 84 mln USD. Generally, in 2015/16 MY Ukraine exported soybean meal to 19 countries. Belarus became the largest buyer of the commodity from Ukraine, and in September-May the country imported nearly 75.3 thsd tonnes of Ukrainian soybean meal, or 54.1% of the general supplies. Also, the list of main customers included Turkey - 18.97 thsd tonnes (13.6%), Georgia - 11.62 thsd tonnes (8.4%), Moldova - 10.2 thsd tonnes (7.3%), and Poland - 8.46 thsd tonnes (6.1%), S.Kapshuk added.
The oilseed analyst at APK-Inform Agency, Julia Ivanitskaya reported about the growth of oilseed processing capacities. The expert forecasted that in 2016/17 MY, Ukraine will increase industrial processing of soybeans to 1.3 mln tonnes, up 13% compared with the expected index in 2015/16 MY, and up 3 times compared with the result of 2010/11 MY. In the new season, the reporting index will break a record. Generally, the share of domestic consumption in the structure of Ukrainian soybean distribution totals nearly 40%, and the exports covers the remaining 60%. The domestic market capacity in the country in 2016/17 MY is estimated at 1.9 mln tonnes. At the same time, there is quite low level of domestic processing, which is less than one-third (25-30%) of the general distribution, said the analyst.
The topic of alternative leguminous crops in Ukraine was one of the most significant and interesting at the conference. The Head of the Board at the Association of pulses producers and consumers of Ukraine, Antonina Sklyarenko stressed that by 2020, the general planted areas under alternative legume crops (chickpeas, beans and lentils) in Ukraine will reach 225-280 thsd ha, an increase of over three times compared with the results expected for the current year (81-92 thsd ha). At the same time, all reporting crops will increase their planted areas: chickpeas areas will increase from 40-45 thsd ha in 2016 to 100-125 thsd ha in 2020, beans - from 38-42 thsd ha to 75-85 thsd ha, lentils - from 3-5 thsd ha to 50-70 thsd ha, said the expert. According to her, the high profit-making capacity of alternative legume crops production will contribute to development of the trend. So, in 2015/16 MY the profitability of chickpeas cultivation will total nearly 10`300 UAH/ha in terms of the production costs at 9`500 UAH/ha. For beans, the indices will reach 18`000 UAH/ha and 10`500 UAH/ha, and for lentils – 18`300 UAH/ha and 9`000 UAH/ha respectively, explained A.Sklyarenko.
Also, the theme of climate changes attracted attention. In terms of keeping of the current rate of global climate warming, in the coming years Ukrainian agrarians may face with significant reduction of the yield indices of soybeans, declared the Head of the agrometeorology department at the Ukrainian hydrometeorological center, Tatiana Adamenko during her speech at the conference. Increasing of air temperature indices and rising of carbon dioxide content in the atmosphere can lead to some growth of soybean yields. But finally, the factor will depend on the level of precipitations and drought periods, said the expert. During several recent years, Ukraine clearly demonstrates the tendency of strengthening of the climate aridity. As for possible ways to increase soybean yield in the current Ukrainian climate, T.Adamenko called cultivation of the oilseed varieties with deep root system as one of the methods, allowing to use of moisture content from a depth of 1.5 m; as well as cold-tolerant oilseed varieties for very early planting dates, allowing to form the harvest volumes until coming of late summer droughts. Also, increasing of the number of irrigated fields is one more method – such factor usually increases the yield to 5-6 t/ha, the expert said.
The session focusing on the global market of soybeans and its by-products started with report of the Deputy Commercial Director on sales of oilseed crops and by-products at the agri-industrial holding Astarta-Kyiv, Ostap Palchevsky. The speaker noted that the growth of soybeans production allows to Ukraine to increase the oilseed processing volumes, and in the season-2016/17 the index will reach nearly 1 mln tonnes. According to him, during several recent years Ukraine increased domestic consumption of soybean meal. At the same time, the exports showed almost stable results, and in 2016/17 MY Ukraine will export nearly 0.5 mln tonnes of the soybean by-product. The expert added that Belarus, Turkey and Georgia are the key areas destinations. At the same time, O.Palchevsky noted the growth of soybean oil exports in the structure of supply and demand balances of the product in Ukraine. In 2016/17 MY, the veg oil shipments will reach nearly 170 thsd tonnes, up 100 thsd tonnes compared with the index of 2012/13 MY. At the same time, the domestic consumption of soybean oil in Ukraine continues decreasing. As for the exports of Ukrainian soybean oil, the expert noted its active supplies to China. So, in 2015 the country imported 33.3 thsd tonnes of the Ukrainian commodity, and during the first 4 months of 2016 the shipment volumes already reached 27.2 thsd tonnes. Also, in the current year Malaysia appeared among purchasers of Ukrainian soybean oil (4.1 thsd tonnes in 4 months), the expert added.
The representative of the Danube Soya Association in Ukraine, Inna Ilienko reported about the current condition and prospects of the European market of soybeans. The expert noted that Europe is experiencing a significant deficit of protein, and imports nearly 98% of soy protein (soybeans and soy meal). Of course, the import dependence is quite different in various countries. According to the Association data, the European demand for soybeans totals 40 mln tonnes, including 7 mln tonnes of non-GM soybeans. The European domestic production covers its demand for non-GM soy at 1/3 only. The reporting indices open rather great prospects for Ukrainian soybean producers, processors, who are ready to confirm the status of the non-GM production through the certification. Because the price difference for non-GM soybean meal totals 70 EUR/t, while the bonus for certification of "Danube soy" or "European soy” - 20 EUR/t.
The analyst at Agritel International, Mikhail Ponomarenko presented his analysis of the current situation on the global soybean market, and talked about the price trends of the season-2016/17. The expert stressed that in 2016/17 MY, soybean stocks in the world will continue declining. According to the forecast, in 2016/17 MY the ending stocks of soybeans in the world will total 68.2 mln tonnes, against 74.3 mln tonnes expected in the current season, and the record level of 78.1 mln tonnes in 2014/15 MY, said the expert. According to M.Ponomarenko, in the new season the consumption volumes of soybeans will exceed its production, which is expected to increase to 324.2 mln tonnes, against 315.9 mln tonnes in the previous year. In particular, the expert forecasted the growth of soybean harvest in Brazil and Argentina to 103 mln tonnes (99 mln tonnes), and 57 mln tonnes (56.5 mln tonnes) respectively, while the USA will reduce the index to 103.4 mln tonnes (106.9 mln tonnes).
The Foreign Trade Coordinator at ALTINATEŞ KİMYA A.Ş., Ibrahim Ertekin reported about the share of Ukrainian soybeans on the Turkish market, as well as about the prospects of the Ukrainian oilseed. During the first 4 months of 2016, Turkey imported 638 thsd tonnes of soybeans, including 172 thsd tonnes of soybeans from Ukraine (27%), said the expert. Also, I.Ertekin recalled that in 2015, Turkey imported 932.7 thsd tonnes of the Ukrainian oilseed, while the general foreign supplies totaled 2.25 mln tonnes. Thus, the share of Ukrainian soybeans in the general import structure of the oilseed on the Turkish market reached 41%, while for the USA - 33%, for Paraguay - 14%. The speaker stressed that improving of the qualitative indicators of soybeans, competitive prices and convenient logistics assists to Ukraine to strengthen its presence on the Turkish market. As for the supplies of Ukrainian soybean meal to Turkey, in 2015 the Ukraine's share in the general imports of the product to the country reached 15%, while Argentina (45%) remained the key supplier of the product. During the first 4 months of 2016, Turkey imported 252 thsd tonnes of soybean meal, including 21 thsd tonnes of the product (8.45%) from Ukraine. In order to increase its market share in the segment of soybean meal, Ukrainian suppliers need to improve the product quality and ensure the stable level of protein content, the expert said.
The final session of the conference focused on the main features of soybean production, storing and processing in Ukraine.
On the second day of the event, delegates visited one of the largest oilseed processing complexes in Ukraine - the plant of Astarta for soybean processing in Globyno (Poltava oblast). The annual production capacity is up to 160 thsd tonnes of feeding high-protein toasted meal, 40 thsd tonnes of soybean oil, and 9 thsd tonnes of granulated shell. Also, the project includes the silo with designed capacity of 42 thsd tonnes and storehouses for finished goods. The necessary engineering, road and rail communications are set up as well. The necessary engineering, road and rail communications are set up as well. Moreover the project is successfully integrated into the production cycle of Astarta and has high level of self-sufficiency in raw materials. The complex was built in optimal time and meets all latest environmental standards. Equipment of leading manufacturers certified in accordance with international standards have been installed at the plant as well as water purification and air cleaning systems designated. Production of high quality goods is one of Astarta`s top priorities. Soybean processing plant fully complies with this tenet. It has high quality control system to monitor all stages of production process from acceptance of soybean through production of finished products, as well as adherence to high environmental standards and requirements.
In conclusion, we can say that the event got success and interest among the market participants. We sincerely hope that all participants of the event managed to constructively communicate with colleagues and competitors of the market, and the new and current market information will contribute to development of the effective and sustainable business!
On behalf of APK-Inform team, I express my thanks to the sponsors and partners of the conference for their assistance in organizing and holding of the event.
Anna Platonova, Head of the organizational committee of the conference