April 26, 2011
 

Ukraine not to expect quick development of grain production

Due to present scenario in the market, grain producers from Ukraine will not be able to increase grain production dramatically in the country in the near future, according to Sergey Stoyanov, General Director of Ukrainian Agrarian Confederation (UAC), on April 20.

He said the low profitability of grain production is one of the reasons that may prevent the essential increase in the grain production industry in Ukraine. According to official statistics, the profitability of grain and leguminous crops production in 2009 totalled 7% and 13% in 2010.

Agricultural producers are not able to reach the level of 80 million tonnes of grains, produced annually, which the government wants to achieve in Ukraine, at the expense of cost-effectiveness, said Stoyanov.

According to him, Ukraine does not provide the active export policy and does not use the favourable conjuncture of foreign markets.

To date in the country, the marketing chain which provides the movement of grain volumes from the field to the vessel does not work. The crisis and the lack of marketable pledges at agricultural producers led to banks stopping to credit the agricultural industry, and if they give credits, the interest rates are very high.

In March 2010, Volodymyr Klimenko, President of Ukrainian Grain Association, said that Ukraine will reach the production volumes of 80 million tonnes of grains in five years, if agrarians provide European indices of grain yields. The strategic programme of grain production increase in Ukraine till 2017, promulgated by Viktor Yanukovych, President of Ukraine, also includes the index for production at the level of 80 million tonnes.

In October 2010, the Ukrainian government officially imposed the quotas for grain exports due to the significant reduction of grain production because of unfavourable weather conditions. Therefore, if grain production totalled over 53 million tonnes in 2008, and over 46 million tonnes in 2009, the production index fell to 39 million tonnes in 2010.