Due to the unprecedented surge in gas prices in Europe, Ukrainian farmers had to face a significant and rapid increase in the cost of drying grain. In addition, this happens just at the time of the grain procurement active phase. Even the historical high yield figures do not improve the situation.
Serhiy Shcherban, an expert on the elevator operation, director of Bilozavodskyi Elevator in Kharkiv region, told the outlet Segodnya that the main component of the drying grain cost is the gas price. Its cost is 40-50% of the elevator tariff cost.
The grain drying process is continuous, it can be postponed until the situation stabilizes. Therefore, according to Shcherban, farmers have to put up with the constant price rise at the elevators and wait for "at least some stabilization of fuel prices."
The inevitable increase in the prime cost of agricultural products provoked by the increase in gas prices will lead to a decrease in the profitability of its production. Accordingly, commodity producers will have to abandon short-term contracts, postponing the supply of grain to the market. This will allow them to at least partially minimize their losses.
Context. As of mid-September, Ukrainian agrarians have threshed a record grain harvest. They have already gathered an all-time high of wheat—33 million tons and of barley—10.2 million tons.