Earlier we already wrote about corn production and exports in Ukraine in the article “How far can Ukrainian corn prices go?“. Today we return to this topic, impressed by the results of our August 2019 crop-tour through the Ukrainian Corn Belt.
GROWING BY LEAPS AND BOUNDS
The corn production in Ukraine has grown by leaps and bounds over the past ten years. This culture was not popular in the early 2000s due to the high cost compared to other cereals, but also because of the memory of unsuccessful experiments with corn of the times of Khrushchev, which led to a massive decrease in wheat production in the USSR. However, this crop has finally made its way into the country. Corn acreage has doubled in 10 years and now reaches nearly 5 million hectares. It is interesting to note that it is mainly the large Ukrainian agro holdings that have integrated corn into their crop rotation. Yields also rose sharply, from 4.5 t/ha in 2010 to 7.8 t/ha in 2018!
Ukraine concentrates one-third of the world’s chernozems. These famous black soils are extremely fertile due to the high organic content and the capacity to keep water reserves. The corn-producing regions in Ukraine are located in the central and northern parts of the country, where precipitation level ranges from 400 to 700 mm with summer thunderstorms, which is very beneficial for spring crops. So such a favorable climate combined with the exceptional potential of the lands boosted the production.
WHERE IS THE LIMIT?
The yields in Ukraine have now reached the European level of 2018. Is there still potential for better results? Absolutely! However, the investments are needed, especially in irrigation. Ukraine has many irrigation channels inherited from the time of the USSR, but the system no longer works. The main obstacle to investment is the prohibition on the sale and purchase of land in Ukraine, because of the moratorium introduced in the early 2000s (we wrote about it here). A new Ukrainian president wants to open the land market, and the question could be answered already in the medium term. The decision to sell the land in Ukraine would allow important investments, including the irrigation installation.
UKRAINE: 4TH LARGEST CORN EXPORTER
Ukraine has become the world’s 4th largest exporter of corn with 29.5 million tons exported in 2018/19, just behind Argentina (36 Mt), Brazil (37 Mt) and the United States (53.3 Mt). In addition, the country stands out favorably from its competitors thanks to the non-GM corn, which is in high demand in the European Union. Demand is growing stronger and is concentrated mainly in Europe and Asia, with Ukraine having a key geostrategic advantage with its Black Sea ports. Thus, the Ukrainian origin fits perfectly the needs of importing countries on the international scene and will keep its place among the major exporters of corn in the coming decades.
If you want to know more about Ukrainian agriculture but also have a qualified insight in the production for corn and other crops, do not hesitate to contact us!