Ukraine: news bulletin end of September

International assistance

• The Cabinet of Ministers of Ukraine signed an agreement with the Food and Agriculture Organization of the United Nations (FAO) on the establishment of a project office in the country to provide it with technical and humanitarian assistance in the face of Russian military aggression.

FAO adopted a rapid response plan to help Ukrainian small and medium-sized farmers and agricultural producers. As of mid-August, the organization provided emergency assistance in the form of seed material and cash for 80,000 people in 13 regions of Ukraine. FAO and the Government of Ukraine, with the financial support of Japan and Canada, are implementing projects of restoring grain storage capacities and supply equipment for loading and unloading grain, modular storage containers, etc. to the Ukrainian farmers from 10 regions.

• As of September 29, more than 38,000 farmers registered in the State Agrarian Register. Of them 17,100 farmers have already applied for participation in the support program financed by the European Union (two types of subsidies: subsidy per ha of cultivated land and for cattle).

• The EBRD plans to invest EUR 1 billion this year to support the Ukrainian economy, risks to be shared by donors and partners. To address the Ukrainian economy’s most urgent current needs, the EBRD is prioritizing five areas: trade finance, energy security, vital infrastructure, food security (covering the provision of liquidity to farmers through banks for the spring sowing season, as well as to agribusiness companies and food producers and retailers), and providing liquidity to pharmaceutical companies.

• JSC Ukrzaliznytsia (UZ) and Deutsche Bahn (DB) at the international exhibition in Berlin signed a memorandum of support and cooperation in the field of international freight traffic, which provides assistance in restoring the Ukrainian railway infrastructure.

• The International Finance Corporation (IFC) from the World Bank Group will enter the capital of a new fund managed by Horizon Capital – Horizon Capital Growth Fund IV (HCGF IV) with an equity commitment of $30 million, and the European Bank for Reconstruction and Development (EBRD) with an equity commitment of $50 million. The target size of the new fund is $250 million. According to IFC representative the Fund will invest primarily in fast-growing technology and export-oriented mid-cap companies primarily active in Ukraine and Moldova, benefiting from cost competitive local platforms with global reach.The Fund will make investments of $10-30 million to acquire minority stakes in 10-15 mid-cap companies with enterprise values of $50-150 million.

International trade

• The Cabinet of Ministers of Ukraine adopted the resolution "On the ban of export of goods from Ukraine to the customs territory of the Russian Federation".

• In the first 8 months of 2022, Ukrainian exports to the countries of the European Union almost reached the pre-war level. And according to the results of the I-III quarters, it is expected to exceed the corresponding pre-war indicators. This was announced by Deputy Minister of Economy — Trade Representative of Ukraine Taras Kachka. 

• Ukraine in the past 2021/2022 marketing year (July-June) exported 1.39 million tonnes of soybeans, which is 5% less than in 2020/21, according to the GrainTrade electronic grain exchange website.

• The volume of transportation of Ukrainian agricultural products to the port of Klaipeda through Poland reached 15,000 tonnes per month, Head of Lietuvos Gelezinkeliai (LTG, Lithuanian Railways) Egidijus Lazauskas told BNS. According to him, currently grain is transported to Klaipeda, and fuel is transported back.

• Exports of organic products from Ukraine to the European Union and Switzerland in January-June 2022 increased by 19.4% compared to the first half of 2021 - up to 160,020 tonnes from 128,840 tonnes, despite problems with logistics and the blockade of Ukrainian seaports.  According to the website of the information portal Organic.info, by the end of 2022, Ukraine is expected to reduce areas under organic products due to the temporary occupation of its southern regions. Read more: https://www.agroberichtenbuitenland.nl/landeninformatie/oekraine/documenten/publicaties/2022/09/27/organic-production-in-ukraine-2021-2022

Sector news

• Changes were introduced to the Requirements for the safety and quality of milk and dairy products. They aim to bring the dairy sector of Ukraine in line with the requirements of European legislation.

Current text introduces improvement of measures regarding the proper production practice of milk production and circulation, and will provide for the introduction of a transparent system and traceability of record keeping and data exchange on the results of laboratory research (tests) using the information and communication system of the competent authority. 

• During the Ukraine Organic Day 23 September, 2022 the current status of the Ukrainian organic sector was presented. The presentations can be found on the webpage of the event. Ukraine celebrates Organic Day for the first time - Organicinfo.ua

• Production of beer in Ukraine (except for non-alcoholic beer with an alcohol content of less than 0.5%) in January-August 2022 decreased by 31.6% compared to the same period in 2021, to 83.9 million decalitres, according to Ukrpyvo. This is a gradual recovery in the industry after a 50% drop in the production of this beer in the first quarter due to the Russian invasion and the shutdown of some of the country's breweries.

• Almost 20% of Ukrainian retailers reduced their staff by more than 10%, while 62% of companies slowed down the process of  hiring new employees, according to a joint study of the Association of Retailers of Ukraine and Rabota.ua. Released data shows that as of August, 14.2% of surveyed retailers laid off up to 10% of their employees, 7.1% of companies – up to one quarter, and 12.8% - about half the staff or more. Nearly 60% of retailers are now fully operational, up 2.1% since April.

• Since the beginning of 2022,7 cases of African Swine Fever were registered in Ukraine (3 — domestic, 2 — wild, 2 — infected objects), of which three cases were in Sumy region and one case each in Kyiv, Chernihiv, Zhytomyr and Kirovohrad regions, reports State Service of Food Safety and Consumer Protection. In each case of confirmation of ASF, proper measures were carried out in accordance with the Instructions for the Prevention and Control of African Swine Fever currently in force in Ukraine, including quarantine restrictions in disadvantaged areas, seizure and destruction of all susceptible animals and their raw materials in the centers of infection, zoning, control of preventing the movement of controlled goods from unfavorable territories, quarantine posts, measures in protection and surveillance zones, etc.

• In Transcarpathia, a business support program to support sheep breeding was started by the JSC DB "Oschadbank" and the NGO "Shepherds' Association of Zakarpattia Oblast".

• The Northwest Atlantic Fisheries Organization (NAFO) assigned to Ukraine a national sea bass catch quota of 150 tons for 2023.

Grains and food security

• As of September 27, Ukrainian agricultural producers sowed the winter crops on the area of 709,000 hectares (15% of the forecast of 4.56 million hectares), according to the Ministry of Agrarian Policy and Food.

• As of September 29, two months since the start of the Grain Initiative, 238 ships left the Ukrainian Black Sea ports with 5.46 million tonnes of foodstuffs destined for Asia, Europe and Africa within the UN Grain Initiative.

• Prices for the Ukrainian feed corn in the ports on the Danube River and the Black Sea increased by $5-10 per tonne over the week to $188-215 per tonne (UAH 7,400-8,200 per tonne) due to growing grain exports by sea and steady rains delaying the harvesting of corn, sunflower and soybeans.

Company news

• The conference "Horticulture: fruit, vegetables, berry growing in war time. Learning to win!" in Rivne gathered more than 200 participants from different regions of Ukraine. Local representatives of the Dutch companies “FreshForward”, “Holland Rosetta” , and Rosana - Koppert Biological Solutions joined the event with their stands.

• The premises of the dairy farm and 4 buildings of the pig farm of “JSC Plemzavod Stepnoi” in the Zaporizhia region were destroyed last week by targeted shelling. "More than 6,000 pigs and 1,000 heifers died due to the destruction. Dairy and meat products of "Stepnoi" were known and deservedly respected far beyond the borders of the region. And with the beginning of the war, she saved the residents of all neighboring communities'' stated in the announcement of the Ukrainian Association of Dairy Producers. This farm is one of the best and most modernized agricultural enterprises in Ukraine.

• The international agricultural research company Corteva Agriscience provided free of charge about 3,000 corn and sunflower seed units to Ukrainian agricultural producers from the affected areas to help carry out the 2022 sowing. According to the company's message, more than 40 small and medium-sized farms in Mykolaiv, Kirovohrad, Dnipropetrovsk, Kharkiv, Luhansk, Chernihiv, Sumy, Khmelnytskyi, Vinnytsia, Chernihiv, Zhytomyr and Chernivtsi regions, which were most affected by the actions of Russian aggressors or due to shortages, received seeds working capital could not start the field season.

• The "Vimal" PPCE, largest Ukrainian producer of potato starch, established the production and sale of potato sorting lines.

• The first three McDonald's restaurants in Kyiv opened on Sep 20 in Kyiv, will be followed by 7 more in Kyiv, and various cities in the west of the country. The restaurants of the chain in Ukraine closed on February 24, 2022 due to security reasons. The company maintains a team of more than 10,000 people, while continuing to pay wages. In addition, more than 700 tonnes of products were donated for humanitarian needs.

• Kernel agro-industrial group resumed production of sunflower oil under the “Stozhar” trademark, this became possible due to the transfer of its production from the temporarily occupied Kharkiv region to Poltava region.  Before the war, Kernel ranked first in the world in the production of sunflower oil (about 7% of world production) and its export (about 12%), and was also the largest producer and seller of bottled sunflower oil in Ukraine. In addition, the company was engaged in the cultivation of other agricultural products and their sale.

• The European Bank for Reconstruction and Development (EBRD) and Raiffeisen Bank (Kyiv) took decision to provide a loan totaling UAH 100 million to PrJSC Enzym (Lviv), a large Ukrainian manufacturer of yeast and baking additives, to replenish working capital and maintain production volumes in the current and next years. 

• Agricultural holding KSG Agro has begun exporting sunflower oil to Poland and Italy, and the first batch of 2,000 tonnes of rapeseed has been sent to Slovakia. In addition, KSG Agro is currently negotiating with partners regarding the possibility of bottling and refining sunflower oil in the EU countries to quickly increase its exports and sell products ready for consumption.

• The Ukrainian agricultural holding IMC and the Swiss company OneSoil signed a strategic agreement on cooperation in the field of R&D, having agreed over the next five years to jointly improve variable-rate technology of goods and materials – seeds, fertilizers and plant protection products on the fields cultivated by the holding. The parties have been jointly implementing precision farming technologies since 2019. The area of joint field research increased to more than 25,000 hectares, while the group's total land bank is more than 120,000 hectares.

• InVenture investment company (Kyiv) is looking for a buyer for a production and warehouse complex in Kyiv region for processing pumpkin seeds and walnuts for $2.45 million.