Insight Conversation: Vitaliy Koval, Minister of Agrarian Policy and Food, Ukraine

Ukraine's grain exports have bounced back strongly, soaring 71% in 2024 so far from 2023 levels, and inching toward prewar levels. The country is also exploring alternative solutions to bolster its agriculture trade globally.

Ukrainian Minister of Agrarian Policy and Food Vitaliy Koval speaks with S&P Global Commodity Insights editor Lalita AVD about the current agricultural landscape, the success of the grain corridor and plans to diversify Ukraine's grain export market amid the Russia-Ukraine war.

Describe the current situation of agriculture in Ukraine. What challenges are farmers facing?

Due to the Russian aggression against Ukraine, about 20% of the Ukrainian territory occupied temporarily is currently being used as agricultural lands. The main problem for farmers is that their assets are destroyed due to the war. They lost their agricultural land, cattle farms and animal farms.

Labor force is a problem as many of our workers are now in the Ukrainian army. There are also financial problems because of losses in the occupied territories. Paying loans and logistics are big problems for our farmers.

Despite the challenges, Ukraine's grain exports have risen this year. Does this indicate the Ukrainian grain corridor is a success and how are exports managed amid Russian attack risks?

We are back to almost pre-war levels. About 88% of Ukrainian agriculture products are exported today through the Ukrainian grain corridor. Today, we have a better situation with our logistics in comparison with 2022.

We are grateful to the Ukrainian army for providing this grain corridor. Due to it, we have no problems with our logistics and our partners do not face logistics issues in their territories.

Mykolaiv port played a key role in Ukrainian grain exports but has remained closed since the invasion. Are there plans to resume operations anytime soon?

The Mykolaiv port is important for us, but everything depends on the military warehouse. Unfortunately, there is a territory occupied by the Russians on the coast. The entire port is dangerous for the passage of ships.

Therefore, until our troops liberate the coast, we do not see any prospects of recovery. The Mykolaiv shipping ports are not instantly controlled by the Ukrainian forces and are in danger because of the Russian attacks.

We need to understand that our militaries control these logistics flows, especially the state harbor of these ports.

What alternative export routes are being explored for exporting grains?

Our task is to have alternative routes. We have already experienced logistical problems; we understand that this is a fighting place. Therefore, we are always looking for other options.

For example, we want to increase our capacity with our neighbors in European countries. We want to have the possibility of transporting grains via pneumatic transport, via special elevators located right on the border.

We are looking for alternative routes for growing the flow of our exports, especially through the European Union. We know the benefits of transitioning through the territories of our partners. We are also interested in creating the needed infrastructure in regions important to us.

The winter wheat sowing campaign in Ukraine is almost complete. How much wheat has been harvested so far?

In 2024, our farmers have harvested 54.33 million mt of grain so far, with wheat accounting for 22.36 million mt and corn 24.59 million mt. In oilseeds, the total harvest included 3.46 million mt of rapeseed, 6.02 million mt of soybeans, 10.2 million mt of sunflower seeds.

What is the export forecast for Ukrainian grains in MY 2024-25? Which countries will be impacted, and how this will affect global demand?

In the beginning of the 2024-25 marketing year (July-June), the balance of wheat grain stocks was 2.6 million mt less than the balance at the beginning of the previous marketing year. Export volumes are expected at 16.2 million mt, compared to 18.4 million mt last marketing year, marking a slight decline from 2023-24.

Ukraine is the first state in the world that is at war and giving its production to another country to provide worldwide food security.

During the first 10 months of 2024, the main importers of Ukrainian wheat were Spain, Indonesia, Egypt and Vietnam.

We expect a total export of 40.3 million mt of grain for 2024-2025. Wheat is 16.2 million mt, barley is 2.9 million mt, and corn is approximately 20.5 million mt.

Oilseed exports are forecast at nearly 6.6 million mt, of which sunflower seeds are 300,000 mt, soybeans are 3.7 million mt, and rapeseed 2.9 million mt. Export of sunflower oil in 2024-25 may amount to 4.6 million mt, soybean oil about 300,000 mt, and rapeseed oil also nearly at 300,000 mt.

Can you shed light on the minimum export price regime and its impact?

This mechanism has been working since Dec. 1. In the first few days, we felt the complexity of the transition from one system to another, but today this system is working well.

The main purpose of introducing the export security regime is to counteract the use of illegal export schemes of such type of goods, and especially by entities of foreign economic activity.

How much grain has been exported through the Grain from Ukraine initiative?

We have exported more than 280,000 mt to 12 African countries, including Nigeria and Kenya, and we plan to continue this initiative because it is very important.

Ukraine gives a message to the world that bread is help, not a weapon.

Is Ukraine planning an agreement with big buyers like China to secure grain export deals?

Ukrainian agricultural export is a completely private business. We export on behalf of private companies, not state-owned ones.

A lot of companies or businesses contact with different counter agents and brokers, then deliver exportable supplies from our markets.

We are also interested in new markets in Southeast Asia, in China, Bangladesh and other countries.