Source: APKinform (Ukraine)
According to the results of the 2023/24 marketing year, Ukraine has significantly reduced its flour exports and supplied only 92.4 thousand tons of these products abroad, which is significantly lower than the result of the previous season (149.7 thousand tons). This fact was noted by Sergiy Sakirkin, an expert of the Union “Boroshnomeli Ukrainy” in his article.
“The indicators for the export of mill products look very sad. It was worse only in the year of the beginning of the war. Then, in the second half of the 2021/22 marketing year, only 13 thousand tons were shipped, and this was due to objective reasons. This year, too, exports have fallen in the second half of the FY, without any obvious objective reasons,” he says.
In his opinion, this trend will continue and Ukrainian flour mills should not hope for a significant increase in foreign trade.
“And how to increase export volumes when the prices for our products are so low and it is not possible to sell more expensive due to high logistics costs. The prices are only available to Moldova and via Ukrainian ports. And once shipping by car transportation across the western border – the cost of delivery increases 3-4 times. And if we try to keep the prices acceptable for the producer, the buyer does not need such goods,” said S. Sakirkin.
He also emphasized that against the background of a sharp decline in the profitability of flour exports for various reasons, but primarily due to the increase in transportation costs, the export of small-packaged products has increased sharply. These include products packed in paper bags in the range of 0.8 kg to 11.3 kg.
It is no secret that small-packaged products have a higher added value, which allows them to earn more on sales and also carry the manufacturer’s advertising on the packaging. In the total volume of exports, this segment, which used to make up 0.5-1 percent, accounted for a fifth last year. This is due to the fact that the price difference between small-packed products and 20-50 kg bags is between 34 and 64 US dollars for the same consumers with the same transportation costs. The additional costs for bags and packaging services are much lower,” explained S. Sakirkin.