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Ukraine poised for global ag role
Today’s announcement of the opening of DuPont Pioneer’s seed production facility in Stasi, Dykanka region, Poltava oblast, Ukraine, signals the region’s expanding stature as a growing agricultural economy and an emerging player in global food security.
The $40 million investment will support the increasing demand for Pioneer brand maize, sunflower, and oilseed rape hybrids in Ukraine. Pioneer sales revenue in Ukraine has risen by 30% compounded annually between 2006 and 2011. Maize and sunflower unit volume sales have doubled in the same period.
“Surely there is a deficit of quality seeds in Ukraine,” says Iurii Mykhailov, an ag economist who lives in Kiev, Ukraine. But he says that the DuPont Pioneer facility joins several other companies, including Syngenta, Monsanto, France’s Euralis, Germany’s KWS, and Maisadour, a French cooperative.
Ukrainian companies Mais, Swargo, and West Trading Group also have their own seed plants. Mykhailov says that the Ukrainian infrastructure may require ramping up. He pegs the estimated production of corn in 2013/14 at about 22 million tons. “The current throughput of the Ukrainian grain export terminals is 40 million tons per annum,” he says. “The total storage capacity of elevators is 35 million tons. The new storage and export capacities must be doubled to accommodate the growing production.”
He says corn is in demand since it’s used as a substitute for weather-damaged winter wheat crops.
Ukraine currently exports about two-thirds of its corn. “There’s no sufficient demand for feed in Ukraine,” Mykhailov says. “The new seed facilities will help to improve the seed quality that in turn will help increase exports. Ukrainian corn is welcome in the Middle East and North African countries.”
Mykhailov says that technological improvements also will play a critical role in Ukraine’s goal to double its grain production. “The main improvement can be achieved by increasing fertilizer usage, irrigation in the southern regions, and adequate machinery,” he says.
He adds that other foreign countries are exploring the potential for investment, including Libya and China: China has invested in increasing Ukraine’s grain storage capacity.