Ukraine's Kernel adjusts sowing structure in 2024 with more cropland for wheat, soybean, rapeseed

MOSCOW. Oct 29 (Interfax) - Ukraine's Kernel, one of the country's largest agricultural holding companies, has substantially adjusted the sowing structure for the 2024 season in order to restore the sustainable farming and crop rotation methods disrupted as the result of a crisis, Ukrainian media reported citing the company's annual report.

According to the report, the cropland for sunflower was reduced by 44% to 67,000 hectares, which accounts for 19% of the total crop area, compared with the higher levels at 33-36% seen in 2022 and 2023.

"These higher levels marked a deviation from the normal crop rotation practices, which could in time lead to lower yields due to higher risks of the development of pests and diseases. In 2022-2023, it was necessary, however, in order to keep this high proportion of cropland for sunflower, given the uncertainty related to the grain's export logistics capacities at the time," the company said.

For the 2025 harvest, Kernel is planning a further reduction of its sunflower fields to 12% of the total, which stands for 40,000 hectares. After that, it intends to gradually return to the steady level of around 25% of the total area, which is consistent with the long-term crop rotation practice.

Corn cropland remained virtually unchanged at 87,000 hectares in 2024.

Kernel also expanded its winter wheat fields to 93,000 hectares, up 52% from the previous year, which accounts for 26% of the company's total production area, the highest for wheat in the group's sowing structure since 2012, the report said.

Kernel increased its soybean and rapeseed areas to 72,000 hectares and 14,000 hectares, respectively, because of the high profitability of oilseed crops in the 2024 fiscal year.

By now, Kernel has completed harvesting all crops except corn.

Amid the drought, yields are lower for a majority of crops, Kernel said. Corn yield is expected to drop by 17% year on year, based on 98% of the harvested area; soybean yields fell by 24%. Wheat yields fell by 8% year on year to 6.1 tonnes per hectare. Sunflower plantations demonstrated greater resilience. The crop's yield remained stable in the company's operating regions, despite the serious consequences of the drought elsewhere in Ukraine.

Kernel is the world's biggest exporter of sunflower oil and one of the biggest producers and sellers of bottled oil in Ukraine. It also grows and distributes agricultural produce.

In 2023, the company reported a net income of $299 million compared with a net loss of $41 million in the previous year. Revenue dropped by 35% to $3.455 billion in 2023 fiscal year, while the company's EBITDA was up by 150% to $544 million. In the first nine months of the 2024 fiscal year, the company's net income fell by 53% to $204 million, with the revenue was down 4% to $2.595 billion and EBITDA fell 36% to $384 million.