My Links

« Performance of Socially Responsible Investments | Agricultural policy and land prices in the Ukraine »

The outlook for agricultural investments has rarely been more favorable.
administrator | 12 October, 2009 15:56

The outlook for agriculture has rarely, if ever, been more favorable. First, world economic growth is projected to increase at a 3.5-percent average annual ratebetween 2008 and 2017, after averaging 2.9 percent annually in 2001-07. Strong economic growth in developing countries, particularly important for growth in global food demand, is projected at 5.8 percent annually for 2008-17.

While agricultural experts agree that it’s very unlikely that prices in the marketing year 2009/10 will surpass the previous year’s benchmark, Ukraine is showing strong signs of bumper crops and an excellent harvest meaning that investment in Ukraine land is set for another good year.

According to the ‘Ukraine Grain and Feed Annual Report 2009’, last year’s bumper crop and large carryover stocks led to export sales being taken to a historic high. These exceptional export levels meant that Ukraine joined the listing of the world’s top grain exporters. Figures released by the Ukraine State Statistical Committee show that grain production in the 2008/09 marketing year experienced a massive 82% year-on-year rise.

The increase in the area of Ukraine land used for agriculture (in particular, grain and pulse crops) was also considerable (14.4% more land was farmed) while yields grew by an impressive 59.2%. Exports are expected to be slightly lower this year, but the Ukraine government estimates that the country’s grain exports will amount to around 7 million tonnes of grain, the second highest level ever and well above average. Part of the reason behind this export boom comes from favourable climatic conditions.

Last winter saw ideal weather in Ukraine for crop planting. The mostly mild conditions have led to 95% of the winter crop being classed as ‘good’ or ‘satisfactory’ by the Ukrainian Meteorological Center. The figure is the highest for the last four years and augurs well for crop yields farmed from Ukraine land during the 2009/10 marketing year. Another factor behind the record grain export levels produced by Ukraine land is the improved grain storage facilities.

Ukraine agriculture is fast catching up with modern technology and techniques. Better and bigger storage is a top priority, particularly when yields are high. Total storage capacity increased by 2 million tonnes last year with the construction of more silos and grain elevators planned for this year. Ukraine’s admission to the World Trade Organisation (WTO) in 2008 was a further contributing factor to Ukraine’s high grain exports.

Membership of the WTO has meant Ukraine has had to adopt international export licensing requirements and abolish grain export restrictions. Agricultural experts are unanimous in that agriculture on Ukraine land has a very bright future. Ukraine is one of the very few countries in the world where vast agricultural expansion will not have a negative effect on the environment. Ukraine also enjoys the privilege of some of the world’s most fertile soil.

In addition, improved farming techniques will ensure that Ukraine continues to produce high crop yields over the next decade and beyond. And with world food consumption forecast to increase by over 40% by 2030, Ukraine land and the soft commodities produced on it are poised to become an essential part of everyday life.

Add Comment
Add comment