Record Food Prices & Record Harvest = :))
Fighting a flood of dollars, Ukraine’s central bank bought more than half a billion dollars during the first three days of this week in a battle to keep the hryvnia from over strengthening. Since the start of this year, the National Bank of Ukraine has made net purchases of $3 billion to prevent the hryvnia from strengthening over 26 to the dollar. Today’s rate is UAH 26.06 to the dollar.
Ukraine’s food exports were up 17% yoy for the first nine months of this year. Exports through September totaled $18.2 million – up $2.6 billion yoy.
Food exports to China are up 36%, hitting nearly $3 billion. Asia took half of Ukraine’s food exports. Next was the EU, taking 30%.
World food prices rose in October for the third month in a row, hitting their highest monthly average in a decade, reports the latest survey by the UN’s Food and Agriculture Organization. World food prices were up 31.3% yoy in October. Wheat prices are up 38%, hitting their highest level since 2012. Of good news to Ukraine, the world’s largest sunflower oil exporter, vegetable oil prices rose 9.6% in October over September, hitting their highest level ever recorded in the FAO Index.
Bolstered by a 30% jump in this year’s wheat crop, to 33 million tons, Ukraine expects to export a record 24 million tons this year, Ukraine will account for 12% of world trade in wheat. Over the last two weeks, Ukraine’s wheat export prices rose 7% after Russia raised taxes on wheat exports. With 87% of the grain harvest in, Ukraine’s Agriculture Ministry predicts a 24% yoy increase in the national grain harvest to a record 80 million tons.
This record harvest is expected to account for .8% of GDP growth this year, the National Bank of Ukraine calculates. This would mean that the projected 100 million ton harvest of grains and oilseeds would account for almost one quarter of 2021 GDP growth of 3.5%, the current consensus forecast.