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4:42 AM Saturday, August 19, 2017
Agriculture
​Ukraine Wins Asian Grain Markets
China, India, Indonesia, Bangladesh, Thailand and South Korea are all now in the top 10 group of importers of Ukrainian grain
image/svg+xml Kyiv Lutsk Rivne Zhytomyr Lviv Ternopil Khmelnytskyi Uzhgorod Chernivtsi Vinnytsia Chernigiv Sumy Kharkiv Poltava Cherkasy Kirovohrad Lugansk Dnipropetrovsk Donetsk Zaporizhzhia Mykolaiv Odesa Kherson Simferopol Sevastopol Ivano- Frankivsk

KYIV – As Asians add bread to their rice diets, Ukraine is positioning itself to become the breadbasket of Asia.

Last year, for the first time, six Asian countries were on the top 10 list of importers of Ukrainian grain, accounting for 52 percent of shipments to the top 10 importers.

“India appeared in the top 10, ranking fourth in terms of value of grain purchases from Ukraine -- while a year ago India was not even present in the top 20,” said Mykola Puhachov, deputy director of the National Scientific Center’s Institute of Agrarian Economy.

Indonesia and Bangladesh doubled their imports of grain from Ukraine. Thailand increased purchases.

Photo: August wheat harvest in Sumi Oblast, eastern Ukraine, near the Russian border. (Credit: UNIAN/Vladimir Lyakh)

Grain Sales Help Boost GDP by 4.7%

Asia’s purchases of boatloads of Ukrainian wheat and corn helped give Ukraine’s economy an unexpected boost. On Tuesday, the State Statistics Service announced that the economy grew 4.7 percent in last quarter of 2016, compared to the same period year before.

China has consolidated its position as the second largest importer of Ukrainian grain, after Egypt.

“China is the largest importer of agricultural products in the world,” said Mr Pugachev. “Moreover, its population is constantly growing. Therefore, even if there is an economic slowdown in China, it will remain one of the major buyers of food products in the world market.”

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Ukraine Up -- US Down

Ukraine, with its heavily devalued currency and low production costs, is gaining market share at the expense of the traditional leader in the field, the United States.

Faced with cheaper competition, the US has seen its share of the global grain trade fall from 65% in the mid-1970s to 30% today. And during that time, world grain producers have added almost 75 million hectares, roughly 20 percent of current US crop land.

In contrast, Ukraine nearly tripled its grain exports in six years – from 14 million tons in 2011 to 40 million tons last year. Last year alone, exports increased 7.5 percent. This year, weather analysts say conditions are right for another bumper crop.

Double Exports by 2030?

With irrigation, private land ownership, and rural credit for seeds, fertilizers and new farm equipment, farm experts say Ukraine’s could double its grain exports by 2030, to 80 million tons.

Not just Ukraine benefits from American’s export decline.

Photo: Flags fly last May for the inauguration of a new grain transshipment complex in Mikolaiv. (Credit: UNIAN/Yuriy Bagryantsev)

Russia: Big Player

Russia, Ukraine’s rival for Black Sea grain exports, has switched -- in one generation since the collapse of communism -- from world’s largest wheat importer to world’s largest wheat exporter.

However, Russian exports are suffering due to the strengthening of the ruble and quality problems.

“India bought 1.5 million tons from Ukraine,” said Kateryna Konashchuk, vice president for trade for AgroGeneration, a Kyiv-based agricultural company. “They are not open for Russian commodities. They prefer Ukrainian. Historically, they have had bad quality from Russia.

Due to the stronger ruble and other issues, Russians exported 24.8 million tons of wheat last year, falling short of their 30 million ton target.

Ukraine Looks East

In Ukraine, as ag supplants metals as nation’s top export, exporters explore new markets.

Last month, for example, Vietnam received is first cargos of Ukrainian rapeseed meal.

For another Ukrainian farm export, sunflower oil, Asia is taking the lead.

Summer visitors to Ukraine are often struck by seemingly endless seas of orange sunflowers. Most of these seeds leave Ukraine in the form of cooking oil. Last year, China and India bought 43 percent of Ukraine’s cooking oil exports. Overall, Ukraine’s exports of vegetable oils jumped 20 percent last year.


For comments and story tips, please email UBJ Editor in Chief James Brooke at james.brooke@theubj.com

Posted Feb. 13, 2017

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