Fertilizer Markets and Finance

OstChem Holding AG, owned by Ukrainian billionaire Dmitry Firtash, resumed chemical production at its Estonian plant as it seeks to sell fertilizers in the European Union.

AO Nitrofert will produce 280,000 tons of ammonia and carbamide a year, Firtash’s Group DF, which combines all his assets, said today in an e-mailed statement. The plant will sell fertilizers mainly to North Europe, according to the statement.

“Resuming production at our Estonian factory opens up for us new opportunities to enter the European market, which can consume 10 million tons,” said Boris Krasnyansky, the chief executive officer at Group DF. “The EU market is a huge market and we want to work there and earn there.”

To contact the reporter on this story: Daryna Krasnolutska in Kiev atdkrasnolutsk@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

China may bid for Belarus’s state fertilizer company Belaruskali, which produces 15 percent of the world’s potash, President Aleksandr Lukashenko said last year. The company is worth as much as $32 billion, according to Lukashenko.

Belarusian companies are considering holding share sales in China, Interfax cited the former Soviet republic’s ambassador in Beijing, Viktor Burya, as saying July 10.

China will want economic benefits from its loans to Ukraine, possibly through access to its natural resources, according to Alexander Valchyshen, head of research at Investment Capital Ukraine in Kiev.

Read more at Bloomberg

Astarta Holding cut hopes for grains harvest, and lopped 20% from its hopes for sugar beet output, as the Ukrainian farming giant revealed it had fallen foul of the “negative” weather which has dented national yields.

The dairy-to-soybean processing group, which this season sowed crops on 236,000 hectares, cut by 100,000 tonnes to 600,000 tonnes its forecast for it grain and oilseed harvests.

Wheat yields, at “approximately” 4 tonnes per hectare, had fallen by nearly 11% year on year, although they remain higher than the national average, pegged by Ukraine’s farm ministry two weeks ago at 2.90 tonnes per hectare, a decline of 15.7%.

For sugar beet, Astarta, Ukraine’s top sugar producer, cut its forecast for the crop by 500,000 tonnes to 2m tonnes.

‘Extremely dry and hot’

The downgrades reflected weather that was “negative” for the group’s farmers in eastern Ukraine, “as the summer months of June and July were extremely dry and hot.

“Drought in eastern and southern Ukraine affected the harvest in our fields in the Poltava and Kharkiv regions.”

The comments follow a second drought-hit season for Black Sea grain production in three years, with Ukraine’s wheat harvest estimated by the country’s farm ministry at falling 27% to 16.3m tonnes.

Read more at Agrimoney

Prospects for Black Sea grain output received a double whammy when Kazakhstan cut its harvest forecast to half 2011 levels, minutes after UkrAgroConsult lowered its estimate for Ukraine’s production.

Sagintai Zhumazhanov, a senior official at the Kazakhstan farm ministry, blamed a decline in rainfall for a cut to 14m tonnes, from 15m-16m tonnes, in the official forecast for the grains harvest.

The figure compares with a US Department of Agriculture estimate - up for revision in a monthly crop report tomorrow – that Kazakhstan will harvest 15m tonnes of wheat alone, plus a further 2m tonnes or so of barley.

And it falls well below the 27m-tonne result, for all grains, last year, a post-Soviet record, boosted by unusually benign weather.

“There has been less rainfall than last year. Therefore, the forecast crop yields are about half those we had last year,” Mr Zhumazhanov said.

‘Cut for silage’

The downgrade followed the reduction by UkrAgroConsult, the much-watched crop consultancy, to 43.4m tonnes, from 45.5m tonnes, in its estimate for the Ukraine grains harvest, representing a fall of some 14% year on year.

The forecast remains in line with that of Ukraine’s official Hydromet weather centre, and a little above that of rival consultancy ProAgro, which on Monday pegged the crop at 42.8m tonnes.

Read more at Agrimoney

The world wheat harvest is to fall by 17m tonnes, led by a slump in Ukraine’s production to an eight-year low, and with Europe’s crop – the world’s biggest – pegged at its weakest in four years.

Global wheat production in 2012-13 will drop to 677.6m tonnes, the US Department of Agriculture said in a much-anticipated report giving initial estimates for crop supply and demand for the season.

The most marked decline will be seen in Ukraine, which will reap 13.0m tonnes of the grain, a 41% decline year on year, reflecting “severe fall drought” that hampered crop development and winter frosts which “further damaged the already-weakened plants” in southern and eastern areas.

A USDA crop tour had revealed that overall crop condition was “not good”.

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Ukraine is a bit like Brazil, but not like China. And that makes it the ideal place to base what will be the world’s biggest egg producer, according to Oleg Bakhmatyuk.

Ukraine, once known as the breadbasket of the Soviet Union, is akin to Brazil in its agricultural potential.

“It has some of the best land on the planet,” he tells Agrimoney.com

And lots of it. Enough to produce 120m tonnes of grain, Mr Bakhmatyuk says, quoting an estimate from Leonid Kozachenko president of the Ukrainian Agrarian Confederation, and a need to “embrace farming technology”.

“Ukraine is like Brazil, but 10 years behind.”

Read more at Agrimoney

Another 350,000 tons to 400,000 tons of soybeans will be exported from Ukraine from March through May and will be followed by a seasonal slowdown in June to August, the researcher said. Soybean exports for the year to Aug. 31 will be up 31 percent, at 990,000 tons, it said.

The country’s soybean harvest was 2.28 million tons last year, or 36 percent more than a year earlier, according to UkrAgroConsult.

To contact the reporter on this story: Kateryna Choursina in Kiev at kchoursina@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

Ukraine’s winter-wheat crop may fall 46 percent after drought and frost ruined plants, according to the national weather center.

The crop will probably fall 8 million to 10 million metric tons, Tetiana Adamenko, head of the center’s agro-meteorology department, told reporters in Kiev today. The prior winter-wheat harvest came to 21.6 million tons, figures from the state statistics office show.

Ukraine imposed curbs on grain exports in 2010 after drought ruined its crop. Prices rose to a 23-month high in Chicago trading in August of that year, contributing to record global food costs.

Grain from the current crop was lost on 35 percent to 40 percent of planted areas according to the center’s preliminary estimate, Tetiana Adamenko, head of its agro-meteorology department, told reporters in Kiev today.

Winter barley was ruined on 60 percent to 70 percent of planted areas, Adamenko said. Winter rapeseed was lost on as much as 60 percent of sown areas.

Read more at Bloomberg

Ukraine’s grain exports fell by 11 percent to 1.7 million metric tons last month from 1.9 million tons in January as wheat shipments declined, the country’s Agrarian Confederation said.

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Belarus may ban imports of Ukrainian sunflower oil, corn and confectionary after the country imposed controls over antibiotics in its food, Ukraine’s Agriculture Ministry said.

Ukraine decided from March 1 to temporarily ban imports of meat and dairy products from Belarus after cases of antibiotics exceeding authorized limits were found in October and “became massive” in February, Ivan Bisyuk, head of the state veterinary and phytosanitary service, said in a statement e-mailed by the ministry’s press service today.

Belarus officials said yesterday at a meeting in Kiev that if import restrictions aren’t removed by Ukraine by 3 p.m. on March 5, Belarus will ban shipments of Ukrainian sunflower oil, corn, salt, confectionary and oilseed meal, according to the statement.

To contact the reporters on this story: Daryna Krasnolutska in Kiev atdkrasnolutsk@bloomberg.net; Kateryna Choursina in Kiev at kchoursina@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter atccarpenter2@bloomberg.net Balazs Penz at bpenz@bloomberg.net;

 Corn exports from Ukraine, vying with Argentina as the second-biggest shipper, may jump 20 percent as bumper harvests boost stockpiles, said an official.

Sales may increase to 15 million metric tons in 2012-2013 from 12.5 million tons this year, according to Andrew Druzyaka, advisor at the State Food & Grain Corp. of Ukraine. That would be a record, according to U.S. Department of Agriculture data.

More supplies from the former Soviet state would add to global inventories as farmers in the U.S., the biggest exporter, expand acreage to the highest level since 1944. That would help fill the gap left by lower drought-hit crops in Argentina and increasing imports by China as diets improve and incomes rise.

Read more at Bloomberg Businessweek

Ukraine moved to quash fears of formal grain export restrictions, saying it had “no plans” for curbs, after US officials stoked concerns by warning of an “unofficial lid” on wheat shipments.

Mykola Prysyazhnyuk, the Ukraine agriculture minister said there was “no reason to talk about curbs” despite the poor condition of winter grains, which has prompted forecasts of a sharply-reduced wheat harvest this year.

“There are no plans to limit grain exports,” he said.

Ukraine wheat stocks, which entered the month at 8.9m tonnes, were being preserved by an already-slow pace of shipments, with “almost no exports so far in February”, Mr Prysyazhnyuk said.

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Russia, for the fourth time in four days, changed its tune over grain shipments, signalling it had raised its ceiling on curbs, hours after briefing that a decision had again been postponed.

The government used the elbow room allowed by a grain harvest which, at 93.9m tonnes, beat earlier forecasts to waive a limit 23m-25m tonnes on shipments it would allow before threatening, unspecified, restrictions.

“Given a revised harvest figure of 93.9m tonnes … the forecast for grain exports in the 2011-12 crop year has been raised to 27m tonnes,” Viktor Zubkov, Russian deputy prime minister, said.

There would be no need for grain restrictions in April, as had looked likely after a strong pace of trade left shipments at roughly 20m tonnes by the end of last month, leaving little headroom for further sales.

Read more at Agrimoney