Home Agricultural Sector in Ukraine
The country possesses 30 % of world’s black soil – the most favorable soil for agriculture. This allows for a certain commercial advantage. Ukraine has been gaining a stronger position on world’s agricultural market over the recent years.
In 2011, Ukraine harvested the highest grain crop in twenty years (since declaring independence). The unprecedented 55mn tones of grain – as well as the removal of the export taxes and quotas, contributed to export boost in 2011. This resulted in Ukraine becoming one of the world’s top three grain exporters. The country also ranks number one in barley exports globally. Moreover, this year Ukraine became the third corn supplier in the world, surpassing Brazil and being the second runner-up to the USA and Argentina.
In 2011, the agricultural production increased by 17.5% y/y, reported the State Statistics Service. The highest growth was seen in the north eastern Ukraine (Kharkov, Poltava, and Sumy regions). Interestingly, both agricultural firms and households experienced production growth of 23.8% and 12.3%, respectively.
In 2011 each region of Ukraine boosted agricultural production while in 2010 overall agricultural production in the country dropped by 1.5 %. In 2011, the agricultural profit rose by 52.3% y/y to UAH 19.8bn (USD 2.5bn), the State Statistics Service has reported. The profit margin edged up to 25.8% from 20.7% in the previous year. Some 79% of farmers ended the year in the black, while 21% saw losses.
In vegetal production, companies reported profit of UAH 17bn, with a profit margin of 31.8%. The production of milk and eggs remained also profitable. The profit margins doubled from 18.6% to 37% for the eggs producers while dairies’ margins inched up from 17.9% to 18.4%. On the opposite, the poultry farms deepened in losses area with the negative margin rising from 4.4% in 2010 to 13.4% in 2011. In 2011, profit margins of meat cattle farms decreased to minus 25.1% against minus 35.9% in 2010, of meat swine farms to minus 3.9% against minus 7.8%, wool production to minus 71.7% against 82.2%. At the same time, it became even more unprofitable to grow sheep and goats for meat (minus 41.1% against minus 29.5%).
Export volume of Ukrainian honey in 2011, has doubled. In 2011, the total yield of honey amounted to 67.5 thousand tons.
The decline in world production, allowed Ukrainian exporters doubling its exports honey. In 2011 was sold around 4.4 thousand tons of honey on foreign markets, being 1.9 times higher than the corresponding figure last year. With the rates in 2011, exporters have received about $ 35 million by export.
Ukrainian honeys price that is exported is $ 2700-3000 / t, up $ 200 from last year and approaching the level of world prices. Strong demand in external markets for Ukrainian honey provides its relatively low price and high quality. Qualitative benefits of Ukrainian honey clear to Germany that the new season has imported 5 times more than last year. This also understood Russia, which finally opened its market to Ukrainian exporters. On global platforms Ukraine supplies, mainly honey from grasses and seeds, because these varieties are the cheapest. By the way, in 2011 slightly increased the production of buckwheat honey, which is associated with an increase in acreage of buckwheat by 40%.
According to official data, along with increased exports and domestic consumption of honey. Sales of honey increased by 3% while that price has risen by 25%.
However, the rising price of honey and honey products in natural markets is not so fast, this is due to the fact that prices are formed apiaries home owners who are interested to implement major products in bulk, which is beneficial for exporters and manufacturers of packaged honey.
Potentially Ukrainian beekeeping industry can produce twice as much honey, about 150 tons annually.
A significant expansion of export geography seed from Ukraine was made possible by several factors, namely the accession of Ukraine to the two certification schemes profiled the Organization for Economic Cooperation and Development (OECD), the accreditation of laboratories Ukrderzhnasininspektsii in an international organization, by definition, sowing qualities of seeds – ISTA. This gave the opportunity to give Ukrainian producers to obtain international certificates and export seeds from Ukraine in 70 countries .
It should be noted that since the beginning of 2012 has already exported more than 4.5 tons of seed to the EU . Derzhsilgospinspektsiey Ukraine developed proposals to the Law of Ukraine “On the seeds for planting,” which will help to harmonize the legislative field of seed requirements of the European Community.
Recall for the 2011 export of goods from Ukraine to the EU amounted to $ 17,969,900,000, an increase compared with 2010 by 37.7%, imports – $ 25,750,600,000, respectively, and 34.8%.The negative balance was $ 7.7807 billion (minus $ 6,049,300,000 in 2010). Export import coverage ratio was 0.70 (for 2010 – 0.68).
In the total exports of goods from Ukraine the share of EU countries amounted to 26.3% , imports – 31.2% (in 2010, respectively 25.4% and 31.4%). The main partners in both exports and imports of goods are Germany (respectively, $ 1,765,100,000 and $ 6,865,700,000), Poland ($ 2,794,100,000 and $ 3,183,300,000), Italy ($ 3,039,500,000 and $ 2,005,700,000 ) and Hungary ($ 1,340,700,000 and $ 1,326,100,000).