Ukrainian grain to China

For China, agriculture and logistics are among the most attractive industries in the Ukrainian economy. The state Chinese group COFCO (China National Cereals, Oils and Foodstuffs Corporation) is showing interest in both.

After entering the Ukrainian market in 2008, COFCO has become one of the largest exporters of Ukrainian grain crops, oilseeds and their byproducts.

Currently, COFCO owns four grain elevators: two in Dnipropetrovsk oblast, one in Kherson oblast and another in Donetsk oblast. The corporation also owns an oil extraction plant in Mariupol, a large port in the south-east of Ukraine.

The corporation has also made one of its largest investments in Ukraine’s south, in Mykolaiv oblast, having constructed a grain terminal worth $ 75 million. Construction lasted 2 years and was completed in 2016. This region wasn’t picked randomly. It is a powerful logistics hub with a developed network of seaports and transport infrastructure.

COFCO plans to upgrade its terminal in Mykolaiv oblast to simultaneously store 40,000 tons of grain. Source: Facebook/Mykolaiv

The terminal has large capacities for receiving grain: stations are designed for unloading at least 120 trucks and 120 railway cars per day. The terminal can receive up to 10,000 tons of grain daily. It employs 150 workers.

“We will be able to seriously increase Ukraine’s ability to preserve grain and other agricultural products. We will be able to increase investments in logistics, improve Ukrainian infrastructure, strengthen trade links between Ukrainian and world companies,” said COFCO’s Vice President Chi Jintao at the terminal’s opening ceremony.

The project was hailed by local officials from the Ukrainian Ministry of Agrarian Policy and Food, Ministry of Infrastructure and Mykolaiv Regional State Administration.

The volume of cargo handled (https://sudohodstvo.org/cofco-budet-razvivat-terminal-v-nikolaevskom-portu/) in 2019 was 4.02 million tons. The cargo structure was dominated by corn – 2.9 million tons (72% of the total transshipment volume) and wheat – 1.04 million tons (26%).

Ukraine is one of the top five exporters of agricultural commodities to the Chinese market and a leading exporter of corn. The country supplies 75 percent of corn imports to China. China’s share in Ukrainian grain exports is 9.6%, the second highest after Egypt (14.1% of grain exports). In the 2018-2019 marketing year, exports of grain corns and legumes amounted to 49.995 million tons, including 29.822 million tons of maize.

COFCO plans to upgrade its terminal by installing a bunker to simultaneously store 40,000 tons of grain, as well as oil storage tanks. The company also wants to use a 140-meter long berth.

In total, COFCO plans to invest up to $30 million in the berthing capacity of Mykolaiv port and river logistics in Ukraine.

 

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