Changes in the weather patterns in Ukraine in the past few years have “made corn growing more attractive and less risky compared to other agricultural crops traditionally grown in Ukraine,” says the US Department of Agriculture in the commentary for the publication.
“This year’s expected corn harvest of 29m tonnes has set the stage for a 35 per cent jump in exports to 18m tonnes, catapulting the eastern European country to the world’s second-largest corn exporter alongside Argentina and Brazil,” The Financial Times writes.
Ukraine has high hopes for its corn boom as it “is grappling with its second recession in five years, a ballooning current account deficit and also hit by the recent emerging market currency turmoil that has depressed Kyiv’s foreign currency reserves to dangerously low levels.”
Grain exports – expected to total a record $5.5bn this year, according to consultancy Ukragroconsult – have not been able to offset the sharp declines in revenue from heavy industry and other resource sectors. However, Roman Olearchyk and Emiko Terazono, the authors of the article admit, “with investments in agriculture expected to rise, the sector’s growth is expected to provide diversity for an economy that is regarded as being too reliant on exports of steel and minerals.”
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“The country’s first ever shipment of corn to China is expected to leave ports in the coming weeks as part of a $1.5bn loan-for-corn deal brokered by both countries last year. Countries including Egypt, Israel, and Spain are among the largest buyers of Ukrainian corn, while producers are also making inroads into Asia, exporting to South Korea, Japan and Malaysia, thanks to competitive prices compared to US and South American counterparts. Asian importers, traditionally reliant on US and Latin America, are also keen to diversify their sources after the worst US drought in 50 years in 2012 devastated corn crops, leading to a price surge,” writes The Financial Times.
Ukraine’s rising prominence in the world agriculture markets has attracted Monsanto, the US agritechnology group, which announced plans to pump $150m into building a seed production facility, and Dupont Pioneer this summer started production at a $40m seed plant.
However, the grain exports are not without challenges: “the country’s infrastructure is desperately in need of investment in equipment, grain storage and logistics such as ports, roads and railroad,” the newspaper says.
