05/2017
#
12 U K R A I N E Agriculture Bulletin Cabinet of Ministers hosts land reform meeting
IFC to allocate USD 90 million to Nibulon Europe excludes tomatoes, wheat from tariff quotas Agricultural exports up in the first quarter of 2017
All materials are published “as is� and are the property of their respective owners.
Contents State Initiatives ........................................................................................................... 2 1) 2) 3)
Cabinet of Ministers hosts land reform meeting ............................................................................ 2 Ukraine to revive agricultural engineering program ....................................................................... 2 2017 agricultural subsidies over UAH 322 million so far................................................................. 2
Foreign Aid ................................................................................................................. 3 4)
IFC to allocate USD 90 million to Nibulon ....................................................................................... 3
Private Sector.............................................................................................................. 3 5) 6) 7) 8) 9) 10)
Europe excludes tomatoes, wheat from tariff quotas .................................................................... 3 Investments in agriculture increasing in 2017................................................................................. 3 Agricultural exports up in the first quarter of 2017 ........................................................................ 4 Fruit and berry forecast lowered 29% after May frosts .................................................................. 4 African swine flu outbreaks in Poltava, Cherkasy............................................................................ 4 Honey exports reaching new heights .............................................................................................. 5
Note: The Agriculture Bulletin presents a monthly roundup of headlines and news stories related to Ukraine’s agricultural sector. This bulletin is prepared by Business & Finance Consulting—a Swiss-based development finance consulting company with a long history of working in Eastern Europe, Central, South and South East Asia and North Africa. Read more »
BFC Max-Högger-Strasse 6 CH-8048 Zurich, Switzerland
Phone: +41 44 784 22 22 Fax: +41 44 784 23 23
info@bfconsulting.com www.bfconsulting.com
BFC Agriculture Bulletin
State Initiatives 1)
Cabinet of Ministers hosts land reform meeting
May 29th, 2017, http://www.kmu.gov.ua/control/en/publish/article?art_id=250022483&cat_id=244314975
The Cabinet of Ministers of Ukraine hosted a working meeting with members of Parliament, heads of relevant associations and unions, agricultural experts and representatives from farming enterprises to discuss land reform issues. Speaking at the meeting, Prime Minister Volodymyr Groysman reminded participants that the principal concern for everyone at the meeting was to keep Ukraine’s interests firstand-foremost. The Prime Minister then highlighted that the opening of the land market would likely spur economic development, become an impetus for farming and create industrial infrastructure in rural areas, allowing the country to change from being based on raw materials to one based on added value. The Prime Minister, urging a gradual and cautious path, proposed that the sale should be available only to individuals with Ukrainian citizenship and in an amount not exceeding 200 hectares of land per person. Participants at the meeting then gave arguments for and against differing positions but generally agreed that the issue cannot be limited to just the annulment or preservation of the current moratorium on land sales. The parties agreed to establish an interagency working group comprising government officials, members of Parliament, members of agricultural associations and experts. The working group will develop and present a concept for the first phase of land reform which will take into consideration everyone who is engaged in the development of the agrarian sector of Ukraine. The Prime Minister also called for a draft resolution aimed at preventing abuse within the land market.
2)
Ukraine to revive agricultural engineering program
May 29th, 2017, https://www.ukrinform.net/rubric-economics/2237045-pm-groysman-financing-of-agricultural-engineering-tobe-increased-by-50.html
The Cabinet of Ministers has allocated UAH 550 million from the 2017 national budget to revive agricultural engineering in Ukraine. Moreover, the Cabinet plans to increase this amount by 50% in 2018 and by 50% again in 2019. In announcing the move during a visit to the National Agriculture University of Ukraine, Prime Minister Volodymyr Groysman reaffirmed the government’s commitment to making Ukraine as competitive as possible within the agricultural sector.
3)
2017 agricultural subsidies over UAH 322 million so far
May 22nd, 2017, https://www.rbc.ua/rus/news/kutovoy-nazval-summu-poluchennyh-agrariyami-1495458372.html
In March 2017, 662 Ukrainian farmers received UAH 241.8 million in subsidies under the program of direct government support to the domestic agricultural sector. Since the beginning of 2017, more than UAH 322 million have been distributed within the program. Agriculture Minister Taras Kutovyi noted that this is a positive sign that the program is working well and that any producers who have not yet registered with the program are welcome to file documentation and take advantage of the state support.
Page 2
BFC Agriculture Bulletin
Foreign Aid 4)
IFC to allocate USD 90 million to Nibulon
June 2nd, 2017, http://ubr.ua/market/agricultural-market/mezhdunarodnaja-finansovaja-korporatsija-vydelit-nibulonu-do-90mln-3844418
The International Finance Corporation (IFC) will provide agricultural enterprise Nibulon LLC, one of Ukraine’s largest producers and exporters of agricultural products, with up to USD 90 million in credit for working capital to further develop the company. It is estimated that the loan will enable the company to increase their volume of trade in cereals by 40% over the next five years, meaning an increase to 7 million tons in annual export volume. Nibulon will use the funds to build new crop storage facilities. Nibulon handles grains and cereals from 82,000 hectares of land and owns and operates the second largest network of inland silos and river terminals as well as the marine terminal in Mykolaiv. The company exports mainly corn, wheat and barley to more than 20 countries. Its current annual export volume is 4.5 million tons.
Private Sector 5)
Europe excludes tomatoes, wheat from tariff quotas
June 2nd, 2017, https://www.unian.info/economics/1956426-europe-excludes-tomatoes-wheat-urea-from-negotiated-tariffsfor-ukraine.html
The European Parliament (EP) has decided to hold interinstitutional negotiations on granting Ukraine additional trade preferences following the removal of Ukrainian wheat and processed tomato tariff quotas. The decision was adopted with 475 votes in favor and 102 votes against. During the debates, there were very different opinions on the issue. However, in the end, the EP found a balance between protecting the interests of the European farmers and producers while also helping Ukraine continue its development. Earlier, in September 2016, the European Commission proposed increasing import quotas for some Ukrainian goods into the European Union (EU). In particular, corn quotas would have grown by 650,000 tons, wheat by 100,000 tons, barley by 350,000 tons, cereals and processed grain by 7,800 tons, oats by 4,000 tons, honey by 3,000 tons, grape juice by 500 tons and processed tomatoes by 5,000 tons. At the same time, the Committee of the European Parliament removed tomatoes and barley from the tariffs list. Ukraine’s Ministry of Agriculture estimated that such measures would increase the value of Ukrainian agricultural exports to the EU by USD 196.95 million.
6)
Investments in agriculture increasing in 2017
June 1st, 2017, http://korrespondent.net/business/economics/3857740-ynvestytsyy-v-ahrosektor-ukrayny-vyrosly-na-60
From the beginning of 2017 through March 2017, the total volume of capital investments in the agrarian sector grew by UAH 4.0 billion to UAH 10.9 billion. The share of the agrarian sector in the total volume of investments in Ukraine’s economy also grew, going from 13.5% in the first quarter 2016 to 16.8% in the first quarter of 2017.
Page 3
BFC Agriculture Bulletin
7)
Agricultural exports up in the first quarter of 2017
May 31st, 2017, http://finchannel.com/world/ukraine/65238-in-january-march-ukraine-increased-the-exports-of-agriculturalproducts
In the first quarter of 2017, Ukrainian agricultural exports increased by USD 1.26 billion from the first quarter of 2016 to a total of USD 4.56 billion, a 38.6% year-on-year increase. Live animals and animal products demonstrated the most significant growth in exports, reaching USD 213 million (an increase of 59.1% year-on-year). Ukraine also increased the export of plant growing products by 35% (amounting to USD 2.3 billion), fats and oils of animal or vegetable origin by 36% (amounting to USD 1.28 billion) and food preparations by 51% (amounting to USD 0.75 billion). In particular, sunflower oil exports increased to USD 315.7 million, soybeans exports to USD 225.9 million, corn exports to USD 140.4 million, sugar exports to USD 116.3 million, wheat exports to USD 110.6 million and barley exports to USD 65.8 million. Asian countries remained the main importers of Ukrainian agricultural goods (accounting for 44.4% of agricultural exports), followed by European Union (EU) countries (28.6% of agricultural exports) and African countries (18% of agricultural exports).
8)
Fruit and berry forecast lowered 29% after May frosts
May 29th, 2017, http://minagro.gov.ua/uk/node/23990
The Ministry of Agriculture has adjusted the national forecast for the gross yield of fruits and berries, including grapes, to 1.755 million tons from 2.473 million tons (a 29% decrease) due to damage from May frosts. Stone fruit crops were the hardest hit by the frosts, and their expected yield has been lowered 39% to 292,000 tons, with the yield of apricots now projected at 33,000 tons and that of peaches and nectarines at 9,700 tons. The Ministry is also projecting that the loss of the yield of grapes will be 13%, with farmers expected to gather 333,000 tons of grapes this year instead of the previously projected 380,000 tons. It should be noted that the May frosts had no significant impact on grain crops.
9)
African swine flu outbreaks in Poltava, Cherkasy
May 15th, 2017, http://en.interfax.com.ua/news/economic/421535.html
Ukraine's State Service for Food Safety and Consumer Rights Protection has received confirmation of the outbreak of African swine flu in the Poltava and Cherkasy regions, with pig deaths being recorded in the public joint-stock company Kaplyntsivske (Poltava region) and the private enterprise Shulz (Cherkasy region). Measures are being taken to localize the disease on the site and prevent the spread of African swine flu pathogens. African swine flu causes a hemorrhagic fever and has a high mortality rates in pigs. There is currently no vaccine against the disease.
Page 4
BFC Agriculture Bulletin
10) Honey exports reaching new heights May 11th, 2017, http://ucab.ua/en/pres_sluzhba/novosti/medovi_perspektivi_dlya_ukraini
The export of Ukrainian honey reached record numbers in 2016 — amounting to 57,000 tons, or 5.8 times as much as was exported in 2011. So far in 2017, these numbers are increasing again. 21,900 tons of honey have been exported through the end of April 2017, a year-on-year increase of 2.3 times. Moreover, even more growth is expected later this year. The main importers of the Ukrainian honey over the first four months of 2017 are: the United States (34% of total honey exports, valued at USD 12.6 million), Germany (23% of honey exports, valued at USD 8.5 million) and Poland (10% of honey exports, valued at USD 3.7 million).
Page 5
Prepared by Business & Finance Consulting (BFC) www.bfconsulting.com Articles are taken directly from local sources without any fact-checking; they are provided as a convenience and for informational purposes only. Business & Finance Consulting (BFC)’s editing is limited to providing a short summary in English of the texts, highlighting the main points of the original articles. All rights reserved by the authors. BFC takes no responsibility and does not make any representation or warranty, express or implied, or assume any responsibility whatsoever for the content, accuracy, and reliability, or completeness of any of the articles.