{"id":273584,"date":"2014-11-14T11:01:09","date_gmt":"2014-11-14T09:01:09","guid":{"rendered":"https:\/\/vsisumy.com\/agro_sumy\/selskohozjajstvennyj-sektor-ukrainy-dal-rekordnye-za-poslednee-vremja-pokazateli\/"},"modified":"2026-01-02T20:40:26","modified_gmt":"2026-01-02T18:40:26","slug":"selskohozjajstvennyj-sektor-ukrainy-dal-rekordnye-za-poslednee-vremja-pokazateli","status":"publish","type":"agro_sumy","link":"https:\/\/vsisumy.com\/en\/agro_sumy\/selskohozjajstvennyj-sektor-ukrainy-dal-rekordnye-za-poslednee-vremja-pokazateli\/","title":{"rendered":"Ukraine\u2019s agricultural sector has delivered record results in recent years"},"content":{"rendered":"
\n
Industrial production in Ukraine over the past year has collapsed to record low levels, showing negative dynamics amounting to 5% of GDP. The only sector that continued to function was agriculture, which demonstrated growth in output. Moreover, despite the war and the loss of arable land in Crimea and Donbas, Ukraine rose to third place in the world in gross grain harvest, overtaking countries such as Brazil and Canada. However, even here, upon closer examination, the picture does not appear so rosy.<\/p>\n

Harvest up \u2013 prices down<\/strong><\/p>\n

Economists have long predicted that the agricultural sector could well become the engine of Ukraine\u2019s economy. Certainly, they could hardly have imagined that this would happen so quickly\u2014the collapse of industrial production and the war in 2014 indeed brought the agrarian sector to the forefront in terms of production growth rates. Weather conditions also played a role. According to the Ministry of Agrarian Policy and Food of Ukraine, as of November 7, Ukraine had harvested 58.809 million tons of grain and leguminous crops with an average yield of 42.2 centners per hectare. This is almost 8% more than on the same date last year. Had the sown areas of Crimea and parts of Donbas been preserved, this figure could have exceeded 60 million tons. According to the State Statistics Service, the increase compared to last year amounted to almost 46%. Of the total volume, wheat accounted for nearly 23 million tons, grain corn for 22.3 million tons, and sunflower for 9.6 million tons. According to experts, agriculture as a whole may thus slightly reduce the level of Ukraine\u2019s GDP decline. At the same time, Ukrainian farmers once again did not benefit much from a good harvest. Their profits are traditionally offset by the lack of sufficient grain elevator capacity in Ukraine, which forces them to sell the harvest at the very beginning of the 2014\u20132015 marketing year. Prices for food wheat from early August to September fell from 2.7 to 2.1 thousand hryvnias per ton, but already in September\u2013October returned to levels of about 2.3 thousand hryvnias per ton. A similar dynamic was observed for corn prices. The situation with sunflower was different\u2014prices for the 2014 harvest compared to the same period in 2013 fell by 400\u2013500 hryvnias and amounted to 3.8\u20134.2 thousand hryvnias. Converted at the official exchange rate of the hryvnia to foreign currencies, the price of sunflower was $297 per ton, whereas in 2013 on the same date the price was $344 per ton. Compared to last year, the situation is ambiguous. In addition to the depreciation of the hryvnia, the profitability of agricultural enterprises this year was also \u201ckilled\u201d by a sharp rise in prices for fuel and lubricants, spare parts, machinery in general, as well as fertilizers by 40\u201370%. As a result, the profitability of many grain farms may turn out to be very low, within 5\u20137%.<\/p>\n

Profit on exports<\/strong><\/p>\n

Importers of grain benefited from this situation\u2014due to the rise in the dollar exchange rate, they can settle accounts with Ukrainian counterparties on much more favorable terms, since the price of wheat on the world market has remained at the same level\u2014about $272 per ton. Ukrainian grain traders are generally companies with foreign capital\u2014the only exception is the domestic company \u201cNibulon.\u201d The State Grain Corporation ranks only fifth among importers of wheat and corn in 2014. Thus, most of the farmers\u2019 profits, due to the \u201cscissors\u201d between domestic and foreign prices, will go to foreigners. For many years, Ukrainian experts have said that Ukraine should move from exporting grain to exporting processed products\u2014flour and others. However, the state has so far paid no attention to this problem, and importers have not been interested in solving it.<\/p>\n

Nevertheless, by the New Year experts expect an increase in wheat grain prices to 3 thousand hryvnias per ton. Perhaps for this reason, or perhaps fearing the start of active hostilities in southern Ukraine and the blocking of seaports through which exports are carried out, exporters are actively shipping grain out of the country. As of October 30, exports amounted to about 11.53 million tons, including 6.3 million tons of wheat, 3.2 million tons of barley, 1.8 million tons of corn, and 138 thousand tons of other grains. By the same date, another 400 thousand tons of various grains had been loaded onto ships. Experts suggest that in this marketing year alone, 12 million tons of wheat will be exported. Here another problem may arise\u2014maintaining in Ukraine a sufficient volume of food wheat needed for domestic consumption. The fact is that due to weather conditions, food wheat accounts for only 30% of total grain harvest volumes, while the remaining 70% is feed grain, which is largely unsuitable for the production of bakery products. At the same time, exporters conclude contracts specifically for the export of food wheat, which by the end of the marketing year may well lead to a shortage of food wheat and, accordingly, an increase in its prices. But it will not be the farmers who profit from this.<\/p>\n

If only there were no war<\/strong><\/p>\n

Despite all the risks, Ukraine\u2019s agro-industrial complex remains attractive for investment. In 2013, according to the Ministry of Agrarian Policy, 92 agricultural facilities were commissioned, with investment volumes exceeding 5 billion hryvnias. As of the end of September, the index of capital investments in Ukraine\u2019s agro-industrial complex reached 101.6%. This is a positive factor for the sector, given that the overall index of capital investments across all sectors of the economy amounted to 91.8%. In addition, such factors as a significant increase in supplies of agricultural products to Asian countries, access to European markets, and the substantial potential for further growth of agricultural production make it possible to predict increased investor interest in implementing projects in Ukraine\u2019s agro-industrial complex\u2014provided that a large-scale war does not begin in the country. As of October, Ukraine has already exhausted its export quotas for wheat and other grains to the European Union, granted under the signed Association Agreement with the EU. On October 31, 2014, the European Commission extended trade preferences for Ukraine until December 31, 2015. This will provide an opportunity for guaranteed duty-free sales in the EU of 1 million tons of wheat and 400 thousand tons of corn, despite the fact that implementation of the economic part of the agreement with the EU has been postponed until 2016.<\/p>\n

Poultry saved the day<\/strong><\/p>\n

Despite not very favorable conditions for the development of livestock farming, meat production in Ukraine increased in 2014. Over the first nine months of 2014, it amounted to 2.313 million tons, which is 5.7% more than in the same period last year. As before, poultry and pork production grew at a good pace. At the same time, beef production over the same period fell by 13 thousand tons\u2014to 400 thousand tons. Thus, the poultry meat market now accounts for almost half of the entire market. This is understandable, given the relative cheapness of this meat compared to beef and pork. However, rising prices for feed, electricity, and fuel led to an increase in prices for this product as well\u2014by as much as 50\u201360% for certain groups. Prices for other types of meat also rose following inflation\u2014by 20\u201330%. Restrictions on supplies of Ukrainian meat to Russia also hit producers hard. According to experts, over just nine months producers lost about $1.5 billion in export revenue as a result. However, part of this was compensated by reorienting export flows. Over the nine-month period, exports of meat and meat products increased by 22.4%. In particular, poultry meat accounted for the main share of total meat and meat product exports (81%) and showed rapid growth of 22.8% compared to the same period last year.<\/p>\n

Over the nine months of 2014, Iraq became the largest importer of Ukrainian poultry meat\u2014exports there were 1.8 times higher than in 2013. Among the countries that sharply increased imports of Ukrainian poultry meat were also Uzbekistan, Kazakhstan, Moldova, the Netherlands, and Georgia. Moreover, Ukrainian poultry was exported to the Netherlands for the first time ever. The signing of the Association Agreement with the European Union also opened the way for Ukrainian meat to European markets. However, competition there is quite strong, so no serious growth in production should be expected as a result. Nevertheless, the Union of Poultry Breeders of Ukraine hopes to increase the quota for duty-free supplies of poultry meat to the European Union from 36 thousand tons to 80 thousand tons by January 1, 2015. Growth in exports may be able to compensate for the decline in domestic meat consumption, which is inevitably expected to follow rising prices and falling incomes of Ukrainians.<\/p>\n

Sergey Bondarenko<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Industrial production in Ukraine over the past year has collapsed to record low levels, showing negative dynamics amounting to 5% of GDP. The only sector that continued to function was agriculture, which demonstrated growth in output. Moreover, despite the war and the loss of arable land in Crimea and Donbas, Ukraine rose to third place […]<\/p>\n","protected":false},"author":2,"featured_media":250563,"menu_order":0,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"tags":[],"class_list":["post-273584","agro_sumy","type-agro_sumy","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/vsisumy.com\/en\/wp-json\/wp\/v2\/agro_sumy\/273584","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vsisumy.com\/en\/wp-json\/wp\/v2\/agro_sumy"}],"about":[{"href":"https:\/\/vsisumy.com\/en\/wp-json\/wp\/v2\/types\/agro_sumy"}],"author":[{"embeddable":true,"href":"https:\/\/vsisumy.com\/en\/wp-json\/wp\/v2\/users\/2"}],"version-history":[{"count":0,"href":"https:\/\/vsisumy.com\/en\/wp-json\/wp\/v2\/agro_sumy\/273584\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vsisumy.com\/en\/wp-json\/wp\/v2\/media\/250563"}],"wp:attachment":[{"href":"https:\/\/vsisumy.com\/en\/wp-json\/wp\/v2\/media?parent=273584"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vsisumy.com\/en\/wp-json\/wp\/v2\/tags?post=273584"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}