Ukrainian sorghum – season results

Sorghum used to be planted in order to share lots and for economic needs. But as of to date it is winning the trust of the Ukrainian agrarians. Considering the official data in 2012 the planted area exceeded the last year rate by 2.5 times. In the stated material we will talk about the features of the Ukrainian sorghum market and also the further prospects of its consumption in various industries.

What you plant is what you reap

Grain sorghum is considered the birthplace of the North-East Africa. It is where grows the largest number of its cultural forms. However, it is cultivating the new lands and Ukraine is not the exception. According to the State Statistics Committee, in 2012, they planted nearly 199 ha of grain sorghum against 76.6 thsd ha in the previous year. The agrarians have been highly interested in it for a long time. But the decisive factor which caused its planted areas increase, was the perish of winter crops. According to estimates, the area of sorghum winter crops replanting stated nearly 54 thsd ha. The choice in not accident, the crop has the high yield level (45 c/ha) and the profitability of the grain production is 65%.

Destine the optimistic forecast of the area specialists while the harvesting campaign was going it was obvious there would not be high crop in 2012. The Southern enterprises harvested just 20-25 c/ha, down 20% compared to the last year rate. The major reasons of the harvest decrease was the limited volume of the moisture in the soil and also the difficult weather conditions stated in the period of the grain growing.

However there was the impact of the low-quality seeds. The first-planting agrarians used the grain untreated with antidote. These agents provide the additional defense for the sorghum crops from the various diseases and the harvest is higher then.

The analysts forecast the increase of the sorghum production in 2012 by over 40 USD/t. The crop to reach 306.5 thsd tones, as opposed to 175.9 thsd tones in 2011. The major reason was the planted areas increase.

Sorghum
	2009/10	2010/11	2011/12	2012/13
Planted areas, `000 ha	23	32	76	199
Harvested areas, `000 ha	20	29	67	144,6*
Yield, c/hа	21,3	21,4	26,4	21,2*
Production, `000 tonnes	42	61,4	175,9	306,5*
* Forecast of АPК-Inform Agency

Without logic

We should note that the sorghum price is comparable with the maize price. The premium between crops was 15-15 USD/t in the favor of maize.

The start of the sorghum season faced the sharp increase impacted on the purchasing prices level. Thus in the period of September to October the grain prices used to face the growth. In September the maximum demand price was at the level of 1850 UAH/t EXW, and in October they reached 2070 UAH/t EXW. The favorite grain is white sorghum. Demand prices are 20-30 UAH/t higher of the red one.

However despite the favorable market conjuncture the offers number from the agrarians was limited. The reason was the harvesting campaign started with one month of late. If the temperature is high they stop developing, so the agrarians have faced this season.

And after the harvesting campaign finish most of the agricultural producers put the grain on the stores and started waiting for the demand prices increase. They used to total 2000-2100 UAH/t EXW. In Autumn 2011 most of the agricultural producers were ready to trade grain by minimum demand prices (1550-1650 UAH/t EXW). But this season there is the demand on the high prices but there are no supplies. In the end of October the exporters stopped purchasing sorghum unwilling to work on the agricultural producers rules.

Sorghum exports: to be continued

Sorghum is the universal crop nourishing for human and farm livestock. However despite the positive sides the major volumes produced in Ukraine are for exports. The major countries-importers traditionally are: Egypt, Turkey, Israel. Thus in 2011/12 MY the grain exports totaled 112623 tones as opposed to33460 tones in2010/11 MY. The sorghum market experts note in few years the stated tendency to be continued. The analysts forecast in 2012/13 MY sorghum exports to grow by 1.5 times as opposed to 2011/12 MY. The reason is the countries list increase importing sorghum from Ukraine. The confirmation is in September the major buyers of the Ukrainian sorghum were Poland, Lithuania and Iraq.

Domestic consumption: to be first means to be the best

Sorghum is the crop for exports mostly, but still there is the domestic consumption though it is insignificant. The prospective is for the sorghum use in the cattle-breeding because the stated grain has good feed parameters mostly equal to maize ones.

But on the technological side of view the sorghum processors face the problem of unfitness of the equipment for the sorghum use in the combine-feed production. The major problem is the crop is fine-grained so the processing becomes difficult. At the same time to correct the stated situation and input the additional funds only few cattle-breeders are ready.

Another one prospective industry is spirit. On its chemical and technological possibilities sorghum is equal to maize and wheat. The starch content in the sorghum totals 57-59%, meanwhile for wheat and maize – 57-60% and 53-54% respectively. Considering the above stated facts stated in the normative and technical documentation note in the spirits production the sorghum is able to compete with the major grain crops.

Despite the fact the annual processing of the sorghum in the spirits industry is nearly 2% the experts note in the recent years the stated rate to face increase considering the moisture provision in the south has become much more complicated in the South.

As for the further development on the sorghum market if there is the favorable market conjuncture there is the production increase. The crop potential is high.