Ukraine’s agriculture exports can pass record-breaking $18 billion in 2018

Experts are predicting that Ukrainian agriculture exports could reach or exceed a record-breaking $18 billion by the end of 2018, thanks in large part to growing demand from Asia, especially India.

According to official data, 2012 holds the current record for Ukrainian agricultural exports with $17.9 billion in international sales.

From January through to October this year, exports increased by about $140 million when compared to the same period of last year, according to analysts from the Ukrainian Agribusiness Club Association, or UCAB.

In the first 10 months of 2018, exports have already amounted to roughly $14.7 billion, the association has reported in a statement.

UCAB is bullish about Ukraine’s agriculture potential this year, reporting that there’s “every chance” the country will achieve record-breaking export numbers if there is “preservation of the current dynamics.”

Despite a modest lag in exports until August – when compared to 2017 – the final quarter of 2018 is seeing numbers catch up and exceed the previous year, according to the association’s experts.

So far this year, export of livestock product – almost entirely poultry – is up by about 12 percent, while rapeseed and corn is up by 3 percent and expected to increase more.

Finished food product, notably soybean meal, is also up by 4 percent.

Export of oils and fats from January through to October are down by 7 percent, a loss of $262 million according to UCAB experts who cite a drop in Chinese demand for these products for the decrease in sales.

Ukraine’s agriculture sector sees consistent growth – exports were up 16 percent last year, compared to 2016 – and farming is still seen a lucrative area for investors, even if the land sale moratorium and corruption in the agriculture sector remain points of frustration and concern to international observers.

Asian demand for Ukrainian food fuels growth

Experts here point to growing Asian demand, particularly from India and China, when they explain growth in Ukrainian agribusiness exports.

According a new report published on Nov. 14 by the Institute of Agrarian Economics in Kyiv, India remains the number one importer of Ukrainian food products while sales to European countries have declined slightly.

India imports 10 percent of all Ukrainian food product exports, according to the institute, while European Union countries combined account for about 31.5 percent.

“The main importer of [Ukrainian] agricultural products has been occupied for several years by Asian countries, which bought $5.7 billion worth of Ukrainian food products in the first nine months of 2018. Asia’s share during this period amounted to 43.8 percent of total exports of agricultural products,” the Agrarian Policy and Food Ministry said in a statement on Nov. 14.

Source: Kyiv Post

Walter Kish “This Is Not Your Baba’s Ukraine”

I wear many different hats in the Ukrainian community here in Canada, one of them as а member of the Board of the Canada Ukraine Chamber of Commerce (CUCC). In that capacity, last week I attended an investment trade show that featured some of the most dynamic companies from Ukraine showing off their impressive array of products and services to potential investors and clients here in Canada. These were as advanced, modern, high-tech, and innovative as any you will find here in North America, Europe, or for that matter anywhere in the world. The image of Ukraine being painted by these companies is one that your immigrant baba would have a tough time relating to.

Most of us Ukrainian Canadians, as the children or grandchildren of Ukrainian immigrants, have been bequeathed a somewhat distorted picture of our ancestral homeland, as being primarily a rustic, rural country, rich in agricultural and natural resources, but somewhat behind the more industrialized and modern nations of free world. Even when Ukraine became independent some decades ago, and we were finally able to freely visit our relatives, this image did not change much. That is because most of our older relatives in Ukraine still lived in the “selos”, the rural villages that formed the bedrock of the society and culture that our immigrant forebears came from.

I can remember my first visits in the early 1990’s to the “selos” that my parents came from. The houses had not changed much over the past century. Indoor plumbing was rare, water came from a well, and almost everybody kept cows, pigs and chickens to keep their families fed. Most of the labour on their small plots of land was back-breakingly manual, and the farmer that owned a horse was considered well-off. I can remember being ferried around the village in a horse-drawn wagon.

Of course, things were much more advanced in the larger towns and cities. For all the evils of the Soviet era, education and industrialization made huge advances in Ukraine during the past century. When Ukraine finally gained its freedom in 1991 there was a reasonably advanced base of industry, technology and skilled resources. Once the borders opened up, western expertise and investment capital created strong momentum for Ukraine to catch up with the rest of the free world, and to a large extent it has, far more than many of us realize.

While it is true that agriculture is still one of the largest pillars of the Ukrainian economy, this is agriculture that your baba would not recognize. Large farming enterprises in Ukraine make use of all the latest technologies including GPS, robotics, automated control systems, AI, genetic optimizations, sophisticated R & D labs, and much more. Ukraine is one of the world’s leading producers of wheat, corn, soy, canola, sunflower seeds and honey.

Over the past decade, Ukraine has also become one of the world leaders in outsourced IT software development. There are currently an estimated 50,000 software developers in Ukraine doing work for companies such as Microsoft, Google, Samsung, IBM, eBay, Oracle and many others. Ukrainian schools graduate almost 30,000 IT specialists every year.

Innovative Ukrainian companies manufacture products that are state of the art and are rapidly penetrating world markets. One interesting example I became aware of at the trade show last week was a company by the name of Kodisoft which manufactures smart interactive table tops for restaurants. By using touch sensitive surface controls, diners can order their meals, pay for them, play games, surf the net and engage in a wide variety of functions.

On a more practical level, a Vynnytsia based company by the name of UBC makes refrigeration equipment, beverage and draft beer dispensers and distribution systems that are marketed in over fifteen countries (including Canada) on three continents. Its client list includes such companies as Coca Cola, Heineken, Carlsberg and Molson Coors.

It is obvious that Ukraine is rapidly shedding its image as a stodgy third world country stuck in a Cold War era economy and is rapidly joining the ranks of some of the most advanced and modern countries in the global market for goods and services. Ukraine can compete with the best, and when Ukraine finally cleans up its political issues, the rest of the world better look out.

Source: New Pathway Ukrainian News

Ukraine outlook bolstered by renewed IMF cooperation, EBRD says

New agreement would help to address financing needs and maintain macroeconomic stability

The Ukrainian economy has continued to pull out of sharp recession and the outlook has been bolstered by the prospect of renewed cooperation with the International Monetary Fund (IMF), the European Bank for Reconstruction and Development (EBRD) said.

In its latest Regional Economic Prospects report, the EBRD said the approval and implementation of a new Stand-By Arrangement with the IMF would help to address Ukraine’s near-term external financing needs and maintain macroeconomic stability during the electoral cycle in 2019.

The Bank is forecasting Ukrainian growth of 3.5 per cent in 2018 and 3.0 per cent in 2019, compared with 2.5 per cent in 2017.

It said large foreign exchange public debt liabilities falling due in 2018-19 posed downside risks to the outlook.

The report said fast-growing real wages and remittances had stimulated household consumption, while domestic investment in fixed assets had continued to grow apace in the first two quarters of 2018, albeit at a slower rate compared to the same period of the previous year.

Headline inflation remained elevated at 11.4 per cent year-on-year in the first nine months of 2018, well above the medium-term inflation target of 5 per cent plus-minus one percentage point, although the rate of inflation slid into high single digits between June and September.

The report noted that the National Bank of Ukraine had moved to counter inflationary pressures by raising its key policy rate four consecutive times from 14.5 per cent in January 2017 to 18 per cent in September 2018.

Exchange rate volatility had remained under control in the year to date, despite seasonal variations, it added.

 

Source: EBRD News