Business news from Ukraine

CORTEVA AGRISCIENCE STARTS WORKING WITH UKRAINIAN CROP RECEIPTS

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.

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GRAIN TRADER NIBULON INCREASES CROP YIELD BY 9%

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.

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UKRAINIAN PRODUCER OF CROP PROTECTION AGENTS BOOSTS PRODUCTION BY 25% IN 2019

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.

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VOLUME OF CROP RECEIPTS EXCEEDS UAH 8 BLN

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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VOLUME OF CROP RECEIPTS IN UKRAINE IN 2019 EXCEEDS UAH 6.5 BLN

The volume of crop receipts since early 2019 as of May 31, 2019 totaled UAH 6.5 billion, according to a posting on the Facebook page of state-owned enterprise (SOE) Agroregisters. According to the enterprise, a total of 991 crop receipts were registered in January-May 2019.
Since the start of the introduction of the project in Ukraine in 2015, a total of 1,842 crop receipts for UAH 12.9 billion were registered. Over 900 farmers with different land banks used the tool.
“In the first five months of 2019, farmers received more than UAH 6.5 billion from crop receipts, most of which was spent on spring field work. For comparison, the same figure for 2018 was almost 66% lower and amounted to UAH 2.2 billion,” the enterprise said.
Agroregisters said, with reference to the preliminary forecasts of the Ministry of Agricultural Policy and Food, that the cost of the sowing campaign in 2019 was approximately UAH 134.2 billion, of which UAH 120 billion is provided by own funds of agro-industrial enterprises, and another UAH 15 billion are raised from external sources.
The Crop Receipts project in Ukraine is being implemented by International Finance Corporation (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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UKRAINIAN FARMERS IN APR-JUNE 2019 SIGN FIRST INTL CROP RECEIPTS

Ukrainian farmers in April-June 2019 signed first international crop receipts, the press service of IFC Ukrainian Crop Receipt Project has reported.
According to the press service, at the end of April 2019, Zori Obmacheva LLC (Chernihiv region) issued commodity crop receipt for the supply of corn to the Estonian company Letofin. The receipt was issued in support of the forward contract for the supply of the future corn crop. The agricultural enterprise received pre-financing in the amount of about 40% of the total value of production.
Early June, the Salix agricultural enterprise (Lviv region) raised UAH 1.2 million from the Estonian grain trader Everwelle, which has been operating in Ukraine for over 10 years. An international receipt was issued under a forward contract, the manufacturer received financing at the rate of 12% per annum with settlement in foreign currency.
“Crop receipts allow even small farms to move to a new stage, start working with foreign creditors and attract cheaper financing on a par with agricultural holdings,” the press service said.

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