Aston Lloyd Holding PLC: Exclusive interview with the Ukrainian Agrarian Confederation - 01/02/2010

Leonid Kozachenko, the president of the Ukrainian Agrarian Confederation, spoke exclusively to Aston Lloyd about the future of Ukraine’s agricultural sector, and why the “bread basket” of Europe will continue to be one of the world’s largest grain exporters in 2010.

Ukraine possesses the prerequisites for successful agricultural development. The second largest country in Europe is a land of fertile plains, holding 40% of all rich black earth soil in the world.

Its agricultural sector has been rapidly evolving, particularly in the past years as the flow of foreign capital into the industry continued to increase. There are now over 17 listed agri-business companies in the region, worth a total of US$6.4 billion. Not only international companies are eyeing Ukraine, nations are also leasing Ukrainian land for crop growing. The UAE is reportedly leasing 100,000 hectares of agricultural land from Ukraine.

Aston Lloyd asked the president of the Ukrainian Agrarian Confederation, Leonid Kozachenko, why the Ukrainian agricultural market is so lucrative to investors across the world.

70% of Ukrainian land suitable for wheat growing

Ukraine has millions of hectares of arable land suitable for industrial farming. Famous for its high quality and fertile land, it is an ideal place for crop cultivation.

"When the International Institute for Applied Systems Analysis Research from Austria came to Ukraine two years ago, their research concluded that 70% of Ukrainian land is good for the growing of wheat," said Kozachenko. "Many international set-ups here have their farming, storage and production all done in Ukraine, which helps to streamline their businesses."

Growing potential for crop yield

The current wheat yield in Ukraine (at 3.2 mt/ha) is very close to the US standard of 3.5 mt/ha, and has the potential to go up to 8 mt/ha according to the USDA. When being asked what the current obstacles Ukraine faces, Kozachenko commented:

"Compared with Ukraine, the US uses approximately 7.7 times more fertiliser per hectare. Also, Ukrainian farmers face the problem of equipment depreciation."

High quality fertilisers and modern equipments can be purchased with the increasing amount of foreign investment in the region. And according to Kozachenko, as long as Ukraine can work out these problems, the competitiveness of its agricultural market will be increased massively.

"Ukraine is the world's current third largest grain exporter. It harvested a record 53.3 mt of grains in 2008, and a total of 48.5 mt in 2009 amid adverse weather conditions and the global financial crisis."

Although it is too early to say whether Ukraine can top the 2008 record this year yet, the president is confident that Ukraine will continue to become one of the world's largest grain exporters in 2010.

Ukrainian Agrarian Confederation

Founded in 2002, the Ukrainian Agrarian Confederation (UAC) aimed to maintain a sustainable development of Ukrainian agro-industrial complex and to promote its integration into the world market.

Leonid Kozachenko has over 30 years of experience in Ukraine's agricultural sector. He is also the chairman of the Social Council at the Ministry of Economy of Ukraine, and deputy chairman of the Social Council at the Ministry of Agrarian Policy of Ukraine.