Agriculture

Fitch Ratings has assigned Kernel [KER PW, U/R] the long-term foreign and local currency issuer default ratings (IDRs) of “B” and “B+”, respectively. Fitch has also assigned Kernel a national long-term rating of “AA+” (ukr). The outlooks for the long-term IDRs and the national long-term rating are stable.

Agricultural companies in Ukraine harvested 35.3 mln tonnes of grain and leguminous crops as of October 1, with an average yield of 2.64 tonne per ha. Agricultural companies processed only 13.4 mln ha of sowing area this season. Agrarians have now sown about 6.2 mln ha with winter crops.

A vertically integrated holding, MHP, a major Ukrainian poultry producer, has repurchased about 3.37 mln GDRs (1 GDR = 1 ORD) through its share buy-back program at an average of USD 13.71 per GDR since June. MHP intends to use some of the GDRs purchased under the buy-back program for a compensation and incentive program and any unused GDRs will be held in the treasury until their resale within the next three years.

Agricultural companies in Ukraine harvested 33.5 mln tonnes of grain and leguminous crops as of September 24, with an average yield of 2.59 tonne per ha. Agricultural companies processed only 12.9 mln ha of sowing areas this growing season.

According to the company data, Valeriy Korotkov, the second largest shareholder, sold 6.4% of his stake (1.6 mln shares) in Astarta [AST PW, U/R] to an institutional investor on Tuesday, September 23, for about USD 25.1 per share. The deal totaled about USD 40.2 mln.

Agricultural companies in Ukraine harvested 32.2 mln tonnes of grain and leguminous crops as of September 17, with an average yield of 2.55 tonne per ha. Agricultural companies processed only 12.6 mln ha of sowing areas.

The Ministry of Agrarian Policy of Ukraine decreased its crop harvest projections by 4%, to 38.6 mln tonnes of grain and leguminous crops, mainly due to lower expectations for the corn harvest results of 10.6 mln tonnes, with average yield of 3.8 tonnes per ha. The export forecast for MY10-11 was also decreased by 18% from 15 to 12.7 mln tonnes.

Yesterday, Ukrros [UROS UK, U/R] announced its production plans for the current year. The Company plans to process about 1.27 mln tonnes of sugar beet (35% of which is produced by Ukrros) and produce about 166.5 thsd tonnes of sugar.

According to the Prime Minister of Ukraine, Nikolay Azarov, the Government has no plans to impose restrictions on grain exports. Earlier, the Government had indicated an intention to set quotas for export at a level of 1 mln tonnes for barley, 1.5 mln tonnes for wheat, and 0.01 mln tonnes for rye.

According to Vice Prime Minister Viktor Slauta, a special tax regime for agricultural companies and the fixed agricultural tax will be retained.