Agriculture

According to an announcement made by Ukraine’s First Deputy Minister of Agriculture, Boris Supikhanov, lending to the agricultural sector in Ukraine in 2009 decreased 3.14 times in comparison with the previous period – from UAH 13.5 bln to UAH 4.3 bln. The number of companies borrowing declined almost nine-fold from 15 thsd to 1.7 thsd. The loan portfolio in Ukraine also doesn’t paint a rosy picture, with long- and medium-term loans accounting for an estimated 20 percent of all loans.

Ukraine occupies the first place, by a wide margin, among major exporters of sunflower oil in the new season. In the previous season, Ukraine’s share in world exports was about 40%, with Argentina at 28%, and Russia at 17%. According to the forecast issued by Oil World, global production of sunflower oil in the 2009/10 marketing year will amount to 12.1 mln metric tons. At the same time, according to the USDA, the volume of world trade in vegetable oil in the current season will amount to 4.2 mln metric tons, which is one million metric ton more than witnessed in the previous season.

The gross harvest of oil-producing crops in Ukraine in 2009 is expected to amount to 9 mln metric tons. This total is estimated to include sunflower at 6.1 mln metric tons, while that figure stood at 6.8 mln metric tons in 2008. It also anticipates rapeseed in the amount of 1.89 mln metric tons and soybeans at 0.95 mln metric tons. The area under oil-producing crops has been constantly increasing in Ukraine throughout 2009, with 4.16 mln ha of sunflower planted, as well as 1.4 mln ha of rapeseed and 0.6 mln ha of soybean.

The Kyiv-based Myronivsky Hliboproduct [MHPC LI] has gathered its harvest of rapeseed and wheat crops. The Company reaped 208.3 thsd metric tons of wheat and 38.4 thsd metric tons of rapeseed. On average, the Company’s wheat yield is 5.9 metric tons/ha. The average yield for rapeseed is 2.7 metric tons/ha, whereas the Ukrainian average is 1.9 metric tons/ha. MHP has already concluded forward export contracts for almost the full amount of rapeseed it produced, as well as for 50% of its wheat harvest. The Company has completed harvesting sunflower by 98%, the average yield for which is currently 3.1 metric tons/ha. Corn is currently being gathered, with 40% of the land under cultivation already harvested. Its yield is, on average 8.5 metric tons/ha.

The Government of Ukraine has increased the amount of compensation for interest payments on loans taken out by agricultural businesses in the national currency from 1 to 1.5 bank-rate of the National Bank. In addition, the government has established a 90% rate of compensation for long-term loans taken out by agrarians in 2009, in either national and foreign currencies, for purposes of capital investment. As of July 1, Ukraine’s agricultural producers had attracted UAH 5.8 bln in loans from commercial banks since the beginning of 2009.

As of October 13, Ukrainian agricultural enterprises had planted 6.6 mln hectares of winter grain crops for the 2010 harvest, representing about 85% of the forecast. The current situation with respect to winter crops is rather complicated. Of the winter wheat seedlings got on 3.3 mln ha, (55% of the total), 27% of those shoots (an estimated 900 thsd ha) are weak and sparse. With regard to the sowing of winter rapeseed, 1.4 mln ha of land was sown with this culture, constituting 105% of the forecast level. However, shoots were obtained on only 75% of this area. Almost 30% of the winter rape seedlings produced are weak and sparse. Farmers plan to sow 9.1 mln ha of winter crops for the 2010 season, compared to the 8.1 mln ha of winter grain and 1.4 mln ha of winter rape that were planted in the previous agricultural season.

Ukraine exported 7,107 million tons of grain crops since the beginning of the 2009/2010 marketing year (July 2009-June 2010). So, as of October 8, grain exports from Ukraine amounted to 7106.5 thousand tons, whereas as of the same date in 2008 the export was 6889.7 thousand tons. Specifically, 618.2 thousand tons has been exported since early October. In order of their significance, crop exports were as follows: wheat, 3944.9 thousand tons, barley, 2548.7 thousand tons, and corn, 478.3 thousand tons. Ukraine also exported 765.4 thousand tons of rapeseed, compared to 1276.2 thousand tons in the last marketing year. The Ministry of Agriculture predicts in the current marketing year wheat exports may reach about 18 million tons.

The Government has successfully stabilized the price of sugar: intervention of Agrarian Fund in the commodity market has influenced the price and it went down at the beginning of a new season of sugar-making. In September sugar plants produced sugar at the level of 135 thsd tons. Wholesale price of the plant has fallen from 4900 UAH/t by September 20 to 4700-4750 UAH/t at the end of the month. Retail price dropped from 6,5-7,5 UAH/kg to 5,5 UAH/kg, and the present price of sweet product is stable.

The first month of the new marketing year on the oilseeds market reaffirmed Ukraine`s status as the world`s largest supplier of oil. The September exports totaled 180 thousand tons it`s 2.2 times more than 82 thousand tons of September 2008. Sunflower crop is above average, according to the forecast of the Ministry of Agrarian, gross yield of this crop in the current year will amount to 5.5 million tons, while in record 2008 – 6.8 million tons. Ukraine exported 2.1 million tons of sunflower oil in 2008/2009 marketing year.

The Cabinet of Ministers allocated UAH 219.111 mln from the stabilization fund of the state budget 2009 on a non-returnable basis for partial compensation for the cost of planting sugar beet and flax by agricultural producers, in particular planting sugar beets (UAH 750 per ha) and flax-fibre (UAH 640 per ha).