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  • 2nd International Congress Grain Olymp


    On December 7, 2010 Team Leader Heinz Strubenhoff and Consultant Anna Kuznetsova of German-Ukrainian Policy Dialogue in Agriculture by IER participated in the 2nd International Congress “Grain Olymp”. Heinz Strubenhoff made the Presentation on current and future trends of oilseeds production and prices in Ukraine and it the World. Please click here to download the Presentation.

    In general, the Congress was devoted to the discussion of recent and future tendencies in Ukrainian and Global Agriculture. It was presented that:

    - On the World markets:

       -- Trade only at Chicago’s commodity exchange several times exceeds total World production of a certain agricultural commodity.

       -- Corn dictates general grain trend in production and prices.

       -- World Consumption for food will rise by 70% by 2050 meaning 1.3% of a per year increase. Production adjusts to growing consumption, contradicting to general food prices drop. Prices are expected to move in different directions, up and down. For several nearest years food prices rise is expected.

       -- 75% of soy, 25% of corn, 50% of cotton, about 20% of rapeseed and about 10% of sugar beets grown in the World contain GMO. These numbers can in reality be higher because GMOs pollute land and during crop rotation come to another crop.

       -- World Crop Yields grow faster than seeding areas.

       -- Harvests are enough for food consumption but not enough for biofuels.

       -- African counties are one of the promising markets for future agricultural trade.

       -- Global climate changes shift optimal periods for seeding campaigns. Agriculture should adapt to frequent weather changes.

    - On Ukrainian markets:

       -- Main problems on Ukrainian grain market are: grain export quotas, large stocks, low domestic consumption, some New Tax Code provisions (VAT), uncertainly about spring seeding and fertilizers production monopolization.

       -- Ukrainian small agricultural producers should join together (form cooperatives) to survive in new conditions of doing small agribusiness in Ukraine, associated government policy.

       -- Ukrainian farmers that invest in modern agricultural practices achieve rapeseed yields up to 4.5 t/ha, sunflower seeds – on average 3.5 t/ha. The main problem of those who perform worse is lack of knowledge in farm practices.

       -- Sorghum has profitability of growing in Ukraine of 140%. Some farmers from the South-East of Ukraine have already switched to sorghum.

       -- There are modern agricultural companies in Ukraine that apply electronic maps and GPS systems to supervise for their crop production at above 100 thd ha area. They achieve average grain yield of 5 t/ha (corn – up to 8 t/ha). Applying no-till technologies some agricultural companies improved their productivity (by increasing land quality) and decreased their costs for fuel and fertilizers.

       -- Agricultural land moratorium impedes competitiveness increase in Ukrainian agriculture. There is a black market of land sale and buying. The volume of the black market was decreased since toughening of moratorium legislation in 2007. Agricultural land quantity has decreased in Ukraine through 2001-2010 while on average in the World it increased. Positive tendency in Ukrainian land markets is increase of rent payments from 1-3% to more than 3%.

       -- To go to IPO an agricultural company should be estimated at 70-100 mln USD to be able to attract above 30 mln USD. Making a choice to buy newly appeared at stock exchange Ukrainian company, investors will compare its indicators with the most liquid Ukrainian agricompanies like Kernel, Agroton and Astarta.

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