Dear visitor of AgriMarket,

It does not matter whether you represent a professional agribusiness with certain experience in Ukraine or just a curious Internet surfer. What matters is the fact that you have discovered this page and eager to learn more about this region and its incredible agricultural potential. Indeed, there are amazing facts, which we would like to share with you here.

Ukraine is strategically located right at the crossroads of Europe and Asia. Total territory of Ukraine covers around 604,000 sq. kilometers (233,000 sq. miles), thus making it second largest country in Europe, after Russia. It is larger than France and Switzerland put together or about the size of Texas. Moreover, it is almost perfectly flat with mountains found only on the western border and in the very south of Crimean peninsula.

Ukraine's Black Sea and Sea of Azov coastline stretches for 4,600 km (2,860 miles). A number of large seaports are set to handle large volumes of agricultural commodities. Besides, some commodities are exported directly from Ukrainian river ports to destinations within the Black Sea region and Mediterranean. Ukraine has a very well developed railway system, which is also used extensively for both domestic transportation of commodities and exports to neighbouring countries.

In 2000 - 2001 Ukraine achieved the highest GDP growth rates among East European countries and is expected to keep this indicator high in the following years as well.

In recent decade Ukraine has remained among world's top producers and exporters of food and agricultural commodities and its importance continues to grow. Let me quote one of my American friends with tremendous experience in developing agricultural projects in over 65 countries. After working in Ukraine for several years and travelling extensively all over the country, he said: "This is the only place on Earth where real potential for significant increase of agricultural output exists. There is almost everything to achieve it: wonderful soils, diligent and well-trained specialists, large labor force and growing world demand for food".

Believe it or not, around 75 percent of vast Ukrainian territory is involved in agricultural production. Moreover, between 90 and 95 percent of land is arable. Some sources claim that Ukraine possesses nearly one third of the world's richest black soils. Ukrainian black soil (chernozem) is used as world soil fertility standard. Scientists say it takes around 300 years to build a centimetre (0.39 inch) of humus. Depth of humus in Ukrainian soils in many regions exceeds one metre (3.3 feet).

Ukraine is blessed with climatic conditions to raise most of major crops. The country's few climatic zones include even a small strip of subtropics at the South Coast of Crimea. The country is often referred to as "breadbasket of Europe" with wheat being its major crop. Besides, Ukraine produces a lot of barley, rye, oats, peas, maize, sunflower seeds, sugar beets, milk, poultry meat, pork, beef and other commodities.

For several years after the break up of the USSR, Ukraine's production of grains and other crops remained low and agriculture in general was in a relatively poor shape. However, already in 2001 Ukraine re-entered the world market as one of the leading producers and exporters of agricultural commodities.

In 2000 market surveys showed that around 92 percent of food sold in Ukrainian stores was produced in Ukraine. Such a small share of imports could be explained by a very fast growth of domestic food processing industry, which uses inexpensive raw materials. Just imagine that it only costs about US $40 to 65 to produce a tonne of wheat, while in the EU countries these costs reach up to US $170 to 220 per tonne. Similar situation is noted for all other major agricultural products. No wonder that around 20 to 25 percent of direct foreign investments that Ukraine has attracted since independence has gone to food processing industry.

With grain production far lower than real potential and even much lower than in the late 1980s, Ukraine remains the largest producer and exporter of grains and oilseeds in Eastern Europe. According to our information, in 2001/02 marketing year Ukraine was the 7th largest world wheat exporter and 8th largest wheat producer; 4th largest barley producer and exporter, as well as second largest rye exporter. For several months in a row grain exports from Ukraine have been exceeding 1 million tonnes per month.

While grain production in 2001 was just around 40 million tonnes, in 1991 it had exceeded 50 million tonnes. Average yield of wheat in the EU is 2.7 times as high as in Ukraine. Such a low level of production on such a good soil is due to poor financial shape of many farms. As a result, most farms apply no or very little fertilisers or chemicals on their farmland yet still achieve decent yields. Another problem is use of old and outdated farm equipment with resulting huge losses. Also, according to our estimates, between 10 and 15 percent of land has remained idle in recent years.

In 2001, when financial situation in Ukraine improved, many farms where fertilisers and chemicals were applied, produced 5 to 6 tonnes of wheat per hectare, which goes in line with the EU yields. If macroeconomic situation and reforms in agriculture continue, Ukraine may reach EU productivity levels in about 7 to 9 years. In this case, annual wheat production in Ukraine could reach 45 to 50 million tonnes and production of all grains could be as high as 90 to 100 million tonnes. Domestic needs, even if sharply increased, will only constitute some 35 to 40 million tonnes, making about 60 million tonnes available for exports. This would be one fourth of total world grain exports. Will this be achieved? Most analysts, traders, producers and processors working in Ukraine see no reason why this cannot be achieved.

Ukraine has traditionally grown and processed a lot of sunflower seeds for vegetable oil. Sunflower oil constitutes about 95 percent of all vegetable oil consumption in Ukraine. In the recent years soybeans and rapeseed have started to enjoy demand as well. Domestic crushing industry has been one of the most dynamically growing industries in Ukraine, with several plants being either refurbished or built from scratch by leading world food processing companies. As a result, Ukraine remains the third largest world producer of sunflower oil and the second largest exporter of this commodity. In 2000/01 MY Ukraine exported more sunflower oil than any other country in the world.

Ukrainian livestock industry still lives through hard times but some of its sub-sectors are already showing strong signs of recovery. With significant investments into poultry industry Ukraine has begun to produce sufficient quantities of the highest quality poultry meat and is already on the lookout for export markets. Production of milk, pork and beef is also sufficient, with trade balance remaining positive. It should also be remembered that chemicals use in agricultural production of Ukraine is one of the lowest in the world.

There is much more to say and we will try to keep you informed about situation in Ukrainian agribusiness through our project AgriMarket.info.

Thank you for your visit and we hope to welcome you here again.

Best regards,

Andriy Yarmak

Project Coordinator

+380 44 2283560

P.S.

Dear visitor, if you have a professional interest in a certain area of agribusiness, we would be glad to provide you with more information upon your request. If you would like to have the most comprehensive and up-to-date information about grain, oilseed and sugar markets of Ukraine and Russia, please click here. If you would like to find partners or clients in Ukraine, we kindly offer you to post your trade leads on our Trade Board or a advertise in our magazines.

We would also be happy to help you organize your visit to Ukraine and meet with local and international companies working in the sector of your interest. Please e-mail us your detailed request and we will get back to you with details as soon as we possibly can.

If you decide to visit Ukraine, besides business, you will surely enjoy a lot of unique historical sightseeing of the town, which was a birthplace of Russia, Ukraine and other Slavic nations, try tasty Ukrainian food and drinks served by beautiful Ukrainian girls. You could go down the Dnipro, one of the largest rivers in Europe as far as the Black Sea visiting a number of historical landmarks on your way and then, you can spend a few days in Crimea, enjoying sun, clean and warm sea and subtropical vegetation. There are a lot of museums, art galleries, nightclubs, many theaters, operas and other places and attractions to entertain anyone for a long time. And all of this is very reasonably priced.