Ukraine exported the record volumes of flour, due to decreasing of the domestic demand

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The FINANCIAL — During 11 months (July-May) of 2014/15 MY, Ukraine exported 232.2 thsd tonnes of wheat flour, which became the absolute record for the reporting period, an increase of 2% compared with the export volumes for the whole 2013/14 MY (228.2 thsd tonnes). But according to APK-Inform analysts, in the current season the volume of flour foreign supplies will reach 255 thsd tonnes, up almost 12% compared with the last year volumes.

It is worth noting that increasing of the Ukrainian flour export rates took place in terms of falling domestic demand, which was caused by reduction of the population of Ukraine, changes in food behaviour and decreasing of the purchasing capacity. Taking into account the geo-political changes in the country, as of January 1, 2015, the population of Ukraine reduced to 42.9 mln people, down 6% compared with the same date last year (45.5 mln people). Moreover, in terms the crisis economic situation, the purchasing capacity of the population significantly reduced, while the costs for raw materials purchasing and flour production significantly increased.

Thus, the low demand and high production costs put the Ukrainian flour milling industry in a very difficult situation. Therefore, the exports of the reporting finished product, which activation is vital for the industry, became one of the main compensatory mechanisms to keep the industry segment running.


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