Ukraine Agribusiness Report Q1 2011
Business Monitor International, November 2010, Pages: 58
Ukraine Agribusiness service provides proprietary medium term price forecasts for key commodities, including corn, wheat, rice, sugar, cocoa, coffee, soy and milk; in addition to newly-researched competitive intelligence on leading agribusiness producers, traders and suppliers; in-depth analysis of latest industry developments; and essential industry context on Ukraine's agribusiness service.
The Ukrainian grain-growing season went from bad to worse in 2009/10, with floods being followed by widespread drought. Our forecasts for 2010/11 reflect the difficulties which farmers have faced during the planting season. The country's dairy market is the weakest of the sectors surveyed in the report and with the dairy herd continuing to shrink, we expect milk production to drop again in 2010. Ukraine's poultry industry is the outperformer and recent developments, including possible approval for exports to the EU, bode well for this impressive sector.
Key Views
- Drought towards the end of 2010 hit sowing of winter grains. For 2010/11, we expect production to slump to 17.0mn tonnes, down 19.4%. Barley to fall to 9.9mn tonnes, down 15.7%. Corn, which was affected less severely, is expected to fall 7.0% to 9.8mn tonnes.
- The woes of Ukraine's dairy industry show no sign of going away. In 2010, we estimate milk production fell another 3.0% to 11.0mn tonnes. Milk consumption fell as a result, dropping from 11.5mn tonnes to 11.2mn. In 2011, we expect the rot to continue and forecast a 3.9% fall to 10.5mn tonnes.
- Poultry and pork production performed well in 2010. We are expecting poultry production to come in at 650,000 tonnes, up 4.9% year-on-year, while pork output is expected to have recovered from a slump in 2009, rising 6.0% to 559,000 tonnes.
-We believe the Ukrainian economy bounced back impressively in 2010, growing 3.8% following 2009's disastrous 15.1% contraction in real GDP.
Industry developments
The Ukrainian government has responded to 2010's disastrous climatic conditions with a series of export quotas on grains. Maize exports have been limited to 2mn tonnes, wheat to 500,000 tonnes and barley to 200,000 tonnes. We expect these measures to remain in place through the first quarter of 2011. An awkward attempt to fix the perception of the country's milk safety standards, the so-called 'Technical Reglament' on 'Raw Fluid Milk's Quality and Safety Assurance' has faced strong opposition from small businesses and local government, and its implementation, which was supposed to take place in 2010, has been postponed until 2015. The incident underlines the extent of the difficulties faced by Ukraine in modernising its dairy industry. Around 80% of milk is still produced by small households. A lack of credit availability in the country means that the share of industrial producers is unlikely to grow any time soon.
In 2008, MHP and other large Ukrainian poultry producers filed an anti-dumping (AD) complaint with the Interagency AD Commission against US and Brazilian chicken parts and leg quartets. The complainants lacked sufficient evidence to prove dumping, the damage suffered and the causal link between the two. In October 2010, the commission released its Final Determination on the case, which revealed that the complainants had dropped the case without imposing AD duties.
In August, the EC ruled that Ukrainian poultry production standards broadly met EU standards and the country has reportedly submitted a plan to the EC to correct any shortcomings. We expect Ukrainian poultry imports to receive the green light from the EC before long, enabling producers with expansion plans, such as MHP, to commence exports. We are watching developments closely.
Executive Summary
SWOT Analysis
Ukraine Agricultural SWOT
Ukraine Political SWOT
Ukraine Economic SWOT
Ukraine Business Environment SWOT
Industry Forecast Scenario
Ukraine Grains Outlook
Table: Ukraine – Wheat Production, Consumption & Trade
Table: Ukraine – Corn Production, Consumption & Trade
Table: Ukraine – Barley Production, Consumption & Trade
Table: Ukraine – Wheat Production, Consumption & Trade
Table: Ukraine – Corn Production, Consumption & Trade
Table: Ukraine – Barley Production, Consumption & Trade
Ukraine Dairy Outlook
Table: Ukraine – Milk Production & Consumption
Table: Ukraine – Butter Production, Consumption & Trade
Table: Ukraine – Cheese Production, Consumption & Trade
Table: Ukraine – Milk Production & Consumption
Table: Ukraine – Butter Production, Consumption & Trade
Table: Ukraine – Cheese Production, Consumption & Trade
Ukraine Livestock Outlook
Table: Ukraine – Poultry Production, Consumption & Trade
Table: Ukraine – Pork Production, Consumption & Trade
Table: Ukraine – Beef & Veal Production, Consumption & Trade
Table: Ukraine – Poultry Production, Consumption & Trade
Table: Ukraine – Pork Production, Consumption & Trade
Table: Ukraine – Beef & Veal Production, Consumption & Trade
Competitive Landscape
Table: Agricultural Commodity Producers & Traders
Table: Agribusiness Suppliers
Table: Integrated Agricultural Producers
Commodity Price Analysis
Softs Update
Cocoa
Table: Cocoa
Coffee
Table: Coffee
Milk
Table: Milk
Sugar
Table: Sugar
Grains Update
Corn
Table: Corn
Rice
Table: Rice
Soybean
Table: Soybean
Wheat
Table: Wheat
Downstream Supply Chain Analysis
Industry Forecast Scenario
Ukraine's Consumer Outlook
Food Consumption
Table: Food Consumption Indicators -- Historical Data & Forecasts
Confectionery
Table: Confectionery Value/Volume Sales – Historical Data & Forecasts
Trade
Table: Ukraine Food, Drink & Tobacco Trade Indicators (US$mn) – Historical Data & Forecasts
Mass Grocery Retail
Table: Mass Grocery Retail Value Sales By Format -- Historical Data & Forecasts
Table: Grocery Retail Sales By Format (%) -- Historical Data & Forecasts
Macroeconomic Forecast
Table: Ukraine - Economic Activity, 2007-2014
Industry Trend Analysis
Dispute Between Traders, Government Unlikely To Disrupt Grain Markets
Table: Ukraine – Wheat Production, Consumption & Trade
Table: Ukraine – Barley Production, Consumption & Trade
BMI Forecast Modelling
How We Generate Our Industry Forecasts
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