Gov’t Says Ukraine’s Agro Output Rose 7.8% YoY in FY18

January 21, 2019
 

News
Ukraine’s agriculture output index rose by 7.8% YoY in full-year 2018, according to data published by the State Statistics Committee (UkrStat) on Jan 16, with crop farming output increasing by 10.7% and livestock production inching up by 0.3% YoY. UkrStat said that industrial agro production advanced by 12.1% YoY while household production rose by 2.2% YoY last year (the country’s farming sector is officially divided into industrial/commercial and household segments). Poltava and Cherkasy provinces (both in Central Ukraine) demonstrated the largest agriculture output growth of 23.7% and 22.5% respectively, while Zaporizhia and Donetsk provinces (both Eastern Ukraine) were the worst performers, showing output declines of 14.4% and 9.7% last year.  

Commentary
The solid output growth in Ukrainian agriculture in 2018 amid the improved weather conditions from 2017 provided an important backstop to the country’s economy, as production growth in industry was unimpressive due to a 2.0% YoY decrease in steel sector output and only a marginal output increase in the machinery sector (UkrStat’s full year industrial data is set to be published later this week). Ukraine’s 2018 nationwide grain harvest came in at a record high of 70.1mn tonnes, rising by 13.2% YoY, according to preliminary data from the Agriculture Ministry.  The grain breakdown was the following: wheat - 24.5mn tonnes, corn - 35.5mn tonnes, barley - 7.3mn tonnes, oat - 410,000 tonnes, and buckwheat - 130,000 tonnes. In non-grain crops, an increase in the national sunflower seed harvest was registered at 12.3% YoY to 13.7mn tonnes. This should allow Ukraine’s agro sector to export up to 50mn tonnes of grains this year, with agro exports thus accounting for around 40% of the country’s total non-service exports in monetary terms.   
We forecast that Ukraine’s grain harvest could increase by a further 2.0% YoY this year to 71.5mn tonnes if the weather cooperates. Current weather conditions are providing optimistic expectations for winter crops.


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