Falling demand from China increases pressure on prices of major export goods in Ukraine
China, the world's largest consumer of resources, is trying to contain commodity prices by reducing import volumes, which immediately affected world prices. High prices for ore and agricultural products, which are Ukraine's main export positions, contributed to GDP growth during the global economic crisis, although they led to higher domestic prices for food and feed.
However, according to the Censor.no, since July, the downward trend in world commodity prices has begun.
Iron ore prices, after reaching a peak of липні 210/ton in July as of September 1, fell in China to.145/ton amid calls from the authorities to reduce production to the level of 2020 in order to reduce harmful emissions.
Following them, and against the background of restraining the volume of housing construction, steel prices fell. This trend will continue in 2022, as demand continues to fall.
Due to high prices for ore and steel, domestic metallurgists significantly increased their revenues and in the first half of 2021 received експорту 10.7 billion from exports, which accounted for 36% of total exports. While the export of grain, oilseeds and butter brought in 8 8.15 billion, or 27% of all exports.
Revenue from Metinvest Group (which is owned by Novinsky and Akhmetov and controls 45% of the ore market) increased by 70% to.8.47 billion. EBITDA (profit before tax and interest) increased 5.3 times to 3 3.8 billion compared to the corresponding period in 2020, including from ore sales – 4.5 times to. 2.46 billion, and the Metallurgical segment – 7.3 times to.1.74 billion. Net profit increased by 3 3 billion to.2.77 billion compared to the first half of 2020.
Revenues of the British company Ferrexpo, which is owned by Konstantin Zhevago and controls 30% of iron ore production, increased by 74.3% to 1 1.35 billion, and net profit – 2.6 times to.661 million.
Significant revenues from ore exports contributed to the strengthening of the hryvnia exchange rate, but from August, due to lower world prices, foreign exchange earnings will decrease, which will increase pressure on the exchange rate on the interbank market.
Due to favorable price dynamics in the first half of 2021, Ukraine doubled its exports of iron ore, semi – finished products – by 57%, rolled products – by 23%, sunflower and other oils-by 12%, although grain exports decreased by 1.3%.
In my 2020/21, Ukraine exported 44.636 million tons of grain and leguminous crops, which is 21.3% lower than in my 2019/20. The decrease in export volumes was offset by an increase in prices for grain and oilseeds, in particular for feed wheat by 8%, for barley – by 14%, for rapeseed – by 46%, for soybeans – by 6%. Corn prices rose by 23% in June, but in July they fell to 2 257/ton, so in just six months they increased by only 8%.
As of September 3, exports of grain and leguminous crops in my 2021/22 amounted to 9.14 million tons, which is 1.1 million tons higher than the corresponding figure last year.
Ukraine, the world's largest producer and exporter of sunflower oil, exported жирів 3.3 billion worth of fats and oils in the first half of 2021, which accounted for 12% of all exports. Prices for sunflower oil at the beginning of the year increased by 22%, but since July they have decreased and are now at the level of January.
The news about China's refusal to buy 400 thousand tons of barley brought down barley prices and increased pressure on the corn market.
However, the increase in prices for agricultural products not only contributes to the development of the economy, but also leads to an increase in domestic prices. Thus, in September 2021, prices for cattle meat increased by 13% compared to September 2020, pork – by 5%, chicken – by 30%, milk – by 15%, butter – by 9%, Eggs – by 46%, barley Groats – by 30%, buckwheat – by 14%, corn – by 25%, sunflower oil – by 70%, sugar – by 75%.
The information is taken from the Censor website.no.
