Wheat crop forecast was lowered to 14 million tons from the previously forecasted 16 million tons. The statement was made yesterday by the
Minister of Agrarian Policy and Food Mykola Prysyagnyuk. He also stated that domestic demand will be satisfied completely as it is measured at
only 6 million tons. Ukrainian Agrarian Fund also has 1.3 M tons as a safety stock. It is less likely that lowered wheat crop will have effect on prices
of bread or flour.

AgroInvest comment: we also lean towards the fact that basic commodity prices will not be greatly affect by lower wheat crops. However, being
aware that the main strategy of the largest agro holdings has been expansion of production lines and storage facilities we assume that the possibility of underuse of these capacities might occur. In this case companies will face the situation when having to provide returns on investments might result in liquidity issues.
 

AgroInvest