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ongoing hybrid war against Ukraine, which has included trade embargos and barriers to the transit of Ukrainian cargos to formerly lucrative markets in Central Asia. It is also the product of longer-term efforts to modernize Ukrainian agricultural practices leading to higher yields, greater infrastructure capacity, and larger harvests available for export.
These improvements have created a rising tide of agricultural exports flowing out of major Ukrainian ports such as Odesa and Mykolaiv to destinations across the globe. Ukraine exported agricultural produce worth $8.97bn in the January-May 2019 period, representing a year-on-year increase of $1.58bn or 21.4%. Thanks to this latest growth, foodstuffs accounted for 42.9% of overall Ukrainian exports during the first five months of the year, making the sector a key source of foreign currency earnings for the Ukrainian economy as a whole.
The geographical scope of Ukraine’s agricultural exports in early 2019 highlights the country’s broadening international horizons. China was Ukraine’s top market, accounting for 8.9% of total agricultural exports worth $795 mn. India was in second place (8.3%, $741 mn), followed by Egypt (8.2%, $737 mn), Turkey (7.6%, $684 mn) and the Netherlands (7.1%, $641 mn). Other major EU markets included Spain ($503 mn), Italy ($333 mn), Poland ($301 mn) and Germany ($250 mn).
Fittingly for a nation known historically as a breadbasket, Ukraine’s top agricultural export remains grain. As the annual grain export season ended on 30 June, Ukraine was poised to claim Russia’s crown as the world’s number one grain exporter with a yearly total of 49.7mn tons sold to international clients, representing a 26% increase on the 2017-18 cycle. This volume was possible thanks to a record 70mn ton harvest in 2018, but Ukraine’s Ministry of Agrarian Policy and Food believes this was no one-off and expects further gains during the current cycle.
Indeed, according to the president of the Ukrainian Grain Association Mykola Horbachev, Ukraine’s current upwards trajectory will continue in the coming years with the country expanding grain exports by at least 40% to reach annual volumes of 70mn tons. Speaking in Kyiv in mid-June, Horbachev said monthly export volumes of 6mn tons during the current season had demonstrated that Ukraine’s agricultural infrastructure is already capable of coping with such growth. Grains will likely remain one of the pillars of Ukraine’s agricultural export industry, but the range of commodities sailing out over the Black Sea from Ukrainian ports or heading west across the country’s EU borders is far wider. There has been a concerted effort to gain access to new international customers in recent years, with Ukrainian food exporters securing entry to 85 new markets for a variety of agricultural produce in 2018 alone.
This process is continuing. In mid-June 2019, for example, Ukraine received the necessary veterinary certification to begin milk and dairy produce exports to Saudi Arabia. Weeks earlier, nearby Qatar certified Ukrainian meat, fish and dairy imports. The challenge now is to produce more value-added foodstuffs domestically in addition to the current focus on commodity exports. Increased production within Ukraine would allow the country to benefit from a greater share of end revenues and boost the economy further.
8 UKRAINE Country Report August 2019 www.intellinews.com