Cropping

Ukraine grain juggernaut continues to rise in the East

Neil Lyon, August 2, 2018

THE rise of Ukraine into a formidable force in world grain production shows no sign of slowing as the eastern European country unlocks further potential for increasing yields and expanding exports.

Ukrainian Grain Association president, Nikolay Gorbachov.

Speaking at the Australian Grains Industry Conference in Melbourne, Ukrainian Grain Association president, Nikolay Gorbachov, said grain production in Ukraine had doubled since 2000 from 41 million tonnes (Mt) to 85Mt, and there was potential for that to double again.

“At the moment our average wheat yield is only four tonnes/hectare compared to France which is 8t/ha and Great Britain which has the world record of 16.8t/ha,” he said.

“Ukraine has increased production because international companies invested in Ukraine, firstly in port facilities, then in banks, trade companies, infrastructure and technology. That’s why we now participate in the economic world and are starting to use the same technologies as the rest of the world.

“We have good soil, but even with these soils we are not leaders in production. That is why we still have potential to increase. Lately we have been starting to use good harvesters and seeding techniques with new crop protection products. That is why we are increasing our production every year.”

Mr Gorbachov said wheat and corn made up Ukraine’s main export grains.

“We produce about 25 million tonnes of wheat a year. For domestic human consumption we use only four million tonnes and export about 17.5 million tonnes per year,” he said.

“Between 2015 and 2017 our wheat yields increased about 30 per cent and I think it will continue to go up.

“We produce 25-30 million tonnes of corn per year. Our domestic consumption is about seven million tonnes per year.

“Eighteen years ago we grew about three million tonnes of corn. Now we grow 30 million tonnes. We still have potential to grow more corn. At the moment our average yield is just 6t/ha compared to the average American yield of 11t/ha.”

Mr Gorbachov said Ukraine continued to expand its export market reach as production increased and the country improved its grain quality standards.

“Eighteen years ago we grew about three million tonnes of corn. Now we grow 30 million tonnes.”

“Before we used to concentrate only on (exporting to) European and North African countries. But we have expanded into the Asiatic countries like India, Indonesia and China,” he said.

“I don’t think Australia and Ukraine are big competitors because the increasing population of the world will give us big opportunities.

“The increasing populations in Asiatic countries will create additional demand for wheat and I think both our countries will be successfully able to export to those countries that are increasing in population, like India, China and Indonesia.”

However, Mr Gorbachov said Ukraine was being held back by its poor supply chain and transport infrastructure.

About 70 per cent of the grain from the nation’s 800 inland silos is transported to port by an under-equipped railway system; 30pc goes by road and a small amount by river barges.

“Our biggest problem is the bottleneck on the railway. We can only deliver about 117,000 tonnes a day by rail, no more. It is because of a shortage of locomotives,” he said.

 

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