Business news from Ukraine

Ministry of Agrarian Policy announces possible crop losses this season

An aerospace study of winter crops in Ukraine revealed their reduction from 9.14 million hectares to 8.38 million hectares (by 0.75 million hectares, or 8.3%), mainly due to the economic consequences of a full-scale invasion of the Russian Federation to Ukraine.
As reported on the website of the Ministry of Agrarian Policy and Food on Wednesday, a decrease in this indicator means a drop in yields from these areas by 15%, which is equivalent to the loss of 4.2 million tons of grain (20% of the crop).
The relevant data was provided by a team of experts from the National Technical University. I. Sikorsky, Space Research Institute of the National Academy of Sciences of Ukraine, Joint Research Center of the European Commission and the World Bank (WB) at a meeting of the coordination meeting of international donors.
The research group is collecting data on direct and indirect damage caused to the Ukrainian agro-industrial complex for possible further recovery of compensation from the Russian Federation. The group continues to monitor crops and yields, and will present an updated forecast for the loss of winter and spring crops in September.
It is clarified that a 20% loss of winter crops will occur provided that they can be harvested in the current volume, without taking into account the ongoing war. Otherwise, crop losses may be higher.
“If it weren’t for the perseverance and sacrifice of our farmers, the losses for the agricultural sector would have been much greater,” Denis Bashlyk, Deputy Minister of Agrarian Policy for Digital Development, Digital Transformations and Digitalization, stated during the meeting.
He added that thanks to cooperation with international partners and the use of modern digital technologies, all losses of Ukrainian agricultural producers are recorded.
“A systematic analysis of crop losses will help attract more support from international partners in the agricultural sector to help agricultural producers survive these difficult times and subsequently revive production,” Klaus Deininger, a leading economist at the World Bank, was quoted by the Ministry of Agrarian Policy as participating in the meeting.
As reported with reference to a study by the KSE Institute, the total amount of direct losses caused to the agricultural industry of Ukraine as a result of the full-scale invasion of the Russian Federation amounted to $4.3 billion by mid-June. military operations – $ 2.14 billion.
In addition, 22% of the total damage to the Ukrainian agro-industrial complex fell on the loss of agricultural equipment ($926 million), 14% – on already manufactured products ($613 million), 6% – on granaries ($272 million), 3% – on livestock breeding ($136 million). ) and inventory items, including fuel and fertilizers ($120 million), 2% for perennial plantings ($89 million).
The total amount of indirect losses of the agricultural industry of Ukraine from the invasion of the Russian Federation for the period from February 24 to mid-June amounted to $23.3 billion. At the same time, the country suffered the largest losses (51%) due to the reduction in the cost of agricultural products caused by the blockade of its seaports – $11.9 billion.


In the July report, the US Department of Agriculture (USDA) reduced the forecast for the harvest of Ukrainian wheat in 2022/2023 marketing year (MY, July-June) by 2 million tons compared to June, to 19.5 million tons, while the estimate of its exports is kept at the level of 10 million tons.
“Production in Ukraine is reduced by 2 million tons to 19.5 million due to a reduction in acreage, as indicated in the statistics provided by the government of the country,” the US Department of Agriculture said in a report released on Tuesday.
According to the document, the assessment of domestic wheat consumption in Ukraine was reduced by 1 million tons – from 11.2 million tons to 10.2 million tons, including for feed – from 6 to 5 million tons, follows from the USDA July report.
In addition, from 6.01 million tons to 5.24 million tons, the forecast for carryovers at the end of the current marketing year was reduced compared to 5.84 million tons at its beginning.
The US Department of Agriculture in the new forecast kept the forecast for corn exports from Ukraine in 2022/2023 MY at the level of 9 million tons, and its harvest – 25 million tons. At the same time, the forecast for its domestic consumption in Ukraine was also left at the same level of 10.7 million tons.
According to the report, in general, the forecast for the feed grain harvest in Ukraine for MY 2022/23 remains at 31.76 million tons, and its exports at 10.83 million tons.
As reported, Ukraine in the marketing year 2021/2022 (MY, July-June) exported 48.51 million tons of grain and leguminous crops, which is 8.4% higher than in the previous marketing year, despite the full-scale invasion of the Russian Federation and difficulties with the export of agricultural products from -for the blockade of Ukrainian seaports.
In general, in MY 2021/2022, the country supplied to foreign markets 18.74 million tons of wheat (12.6% more compared to the same date in 2020/2021MY), 23.54 million tons of corn (+1.9%), 5 .75 million tons of barley (+35.9%), 70.9 thousand tons of flour (-44.1%).
The wheat harvest last year amounted to 33 million tons, feed grain – 53.5 million tons, including corn – 42.13 million tons.

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Corteva Agriscience, an international agricultural company operating on the Ukrainian market, has started using crop receipts to ensure financing of Ukrainian farmers in the conditions of the volatile market.
According to a press release from the company, crop receipts are available for the purchase of seeds and crop protection products of Corteva Agriscience in Ukraine. “Using this tool, farmers get the opportunity of increasing the credit limit for the purchase of Corteva Agriscience products and defer payment if necessary, and also protect themselves from the impact of changes in product prices,” the company said.
Corteva Agriscience said that issuing a crop receipt will take up to three days and will cost an average of 0.3% of the amount of the financial obligation under the receipt paid for the notary endorsement service.
A prerequisite for issuing a crop receipt is that the farmer owns or leases a sufficient number of officially registered farmland. The sown area for a crop receipt is determined by a special formula that takes into account the expected yield of the client for two years, the price of agricultural products and the amount of the obligation.
“Obligations of a producer on the crop receipt are guaranteed by a pledge – the future harvest of crops such as corn, sunflower and wheat. The amount of the obligation is determined by the formula agreed upon by the farmer and Corteva Agriscience, taking into account prices for agricultural products in a certain quantity and quality, but cannot be less than UAH 1.5 million, which is the minimum amount for using the crop receipt,” the company said.



Nibulon (Mykolaiv), one of the largest grain traders in Ukraine, in 2019 increased its crop yield by 9% compared to the previous year, to 367,000 tonnes, of which 138,000 tonnes was wheat. According to the company’s website, a total of 22 divisions of the company in 12 regions harvested 160,000 tonnes of early crops and 207,000 tonnes of later crops.
The company said the highest yield of sunflower was recorded at the branches of Prybuzhanivska (Mykolaiv region) with 3.52 tonnes/ha, Mriya (Khmelnytsky region) and Kupianska (Kharkiv region) with 2.91 tonnes/ha, corn at Khmilnyk (Vinnytsia region) with 10.64 tonnes/ha and Romanivska (Zhytomyr region) with 9.7 tonnes/ha, sorghum at Bilovodska (Luhansk region) with 6.43 tonnes/ha. In the group of early grain, the leaders were the branches of Mykolaiv region: wheat with 5.38 tonnes/ha (Vradiyevska) and rapeseeds with 3.02 tonnes/ha (Lidiyevske).
Nibulon LLC was established in 1991. It is one of the largest operators in the grain market of Ukraine.
Nibulon cultivates 82,000 hectares of land in 12 regions of Ukraine. It exports agricultural products to more than 70 countries. The annual export volume exceeds 5 million tonnes.



Ukravit, a large Ukraine producer of crop protection agents and micronutrient fertilizers boosted production in 2019 by 25%, to 11,000 tonnes. The company told Interfax-Ukraine last week that its share of the Ukrainian crop protection agents and micronutrient fertilizers market in 2019 was around 10%. The company said that this year, Ukravit launched the seventh production facility in Cherkasy with an area of 1,300 square meters, which allowed to increase production by 1,100 tonnes compared to 2018, to 11,000 tonnes. Investment in the project exceeded $3 million.
According to the report, in 2019, the company also began to switch to direct sales and currently has 12 regional sales offices throughout Ukraine.
In addition, Ukravit expands the workshop for the production of plastic containers and storage facilities, renews its fleet.
The company this year began the construction of a plant manufacturing crop protection agents and micronutrient fertilizers in Uzbekistan, but has not yet disclosed project details.
Ukravit was founded in 1999. It is engaged in production and sale of pesticides, fertilizers, means for destruction of rodents and household insects.



Ukrainian farmers received 1,238 crop receipts for the amount of UAH 8 billion since the beginning of 2019, which is 721 receipts and UAH 4.8 billion more than a year ago, the Ministry of Economic Development, Trade and Agriculture has reported.
According to the ministry, since the introduction of the project in Ukraine in 2015 a total of 2,116 crop receipts were registered for the amount of UAH 14.5 billion. Over 130 companies lend using crop receipts, both Ukrainian and international.
By the number of the receipts 60% are financial ones, providing for relations in cash. The average size of liabilities for one financial crop receipt is UAH 5.8 million, for a commodity one – UAH 8.4 million.
Deputy Minister of Economic Development, Trade and Agriculture Inna Meteleva on October 21 at a meeting with representatives of the Crop Receipts Project in Ukraine of the International Finance Corporation (IFC) discussed the issue of changing the nature of relations on the use of crop receipts from contractual obligations for operations with securities by introducing separate legislative changes.
“Changes in the legislation will strengthen the balance of interests of the debtor and the creditor, as well as expand the business opportunities of working with crop receipts, which will provide the prerequisites for the development of refinancing,” Head of the Crop Receipts Project in Ukraine Leah Soroka said.
In the near future it is planned to submit these changes for discussion with stakeholders and interested central executive bodies to form a consolidated position.
The Crop Receipts project in Ukraine is being implemented by IFC, a member of the World Bank Group, in partnership with the Swiss Confederation. The practical application of crop receipts began in 2014 in Poltava region. Soon other regions of the country joined this financial tool.

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