Экономические науки/12.Экономика сельского хозяйства

Alina Hrytsenko, Olga Nikitenko

National University of Food Technologies, Ukraine

STATE AND CURRENT PROBLEMS OF GRAIN MARKET IN UKRAINE

Grain market has always been and still remains the main industry of the agricultural sector of Ukraine. It is a system integrated market of agriculture of Ukraine which has significant production and export potential. Export of grain occupies an important place in the export of agricultural products. To what extent the population is supplied with food products of plant and animal origin depends on the development of this branch.

Fertile soils, favorable climate conditions, large domestic and foreign markets, favorable geopolitical position of Ukraine in the middle of Europe, etc. are all necessary conditions for the development of this agro-branch. But the dynamic development of crop industry does not provide the country’s population with animal products, which leads to the need of consumer market balance through a large part of pork imports. At the same time the efficiency of grain crops is insufficient. Hence, foreign economic activity as to export of crops and their processed products plays the primary role for Ukrainian producers. And import regulations should be followed in accordance with the requirements of the World Trade Organization. Compliance with international standards can only be achieved if industry transits to an innovative model of development and active implementation of modern technologies of food production.

Therefore, the issue of improving the functioning of local food businesses identifying threats and potential growth of the industry as well as improvement in the quality and competitiveness of domestic food is extremely urgent. Such scientists as S. Zhigadlo, M. Palshetkar, V. Boyko , S. Kvasha ,G. Sabluk and others contributed to the issue under consideration.

The main purpose of this work is to determine of the place of the grain industry in the globalized economy, analyse its state and directions of further development.

With over a quarter of the world’s chernozem and 56.5% of all of the land being used as arable, Ukraine relies heavily on its agriculture as a major source of export revenues. Grain production is of prime importance in field crop cultivation and is combined with industrial, fodder, vegetable, melon and gourd cultures and potato crops. Within the structure of crop areas, grain crops account for 46.6%; industrial 11.7%; potato, vegetables, melon and gourd, 6.6%; and fodder crops, 35.1%. Grain production can reach 35-45 million t/year, the major grain crop being winter wheat, followed by barley, maize, rye and oats. Leguminous plants of high protein content include peas, beans, fodder lupin, soy and forage crops. Industrial crops include sugar beet (50% of the total area sown to industrial crops) and sunflower (40%). However, serious economic constraints (loss of the Russian market, unemployment, inflation-recession, failure to achieve privatization, etc.) and ecological problems (Chernobyl, soil degradation through excessive use of agro-chemicals, etc.) have had a serious impact on agriculture [2].

During several recent years the agro-industrial complex of Ukraine has remained one of the most dynamically growing sectors of the economy. In 2014 the agricultural sector established itself as the major driver of the Ukrainian economy, and became the only sector which demonstrated positive growing rates. According to preliminary data of the State Statistics Service of Ukraine, in 2014 the general production of agricultural commodities in Ukraine totaled 252`924.4 mln UAH (including plant growing commodities – 177`443.5 mln UAH, animal origin commodities – 75`480.9 mln UAH), against the result of 2013 – 252`859 mln UAH (including plant growing commodities – 175`895.2 mln UAH, animal origin commodities – 76`963.8 mln UAH). But despite the gradual increasing of the index, Ukraine has not yet reached the level of 1990 period, when the fall of the economy started. According to the State Statistics Service, the result of 2014 reached only 93.2% of the 1990 level, but it was 2.8% higher than in 2013 [3].

Value for in production and export of grain in time is not constant, it is caused by various factors, first of all – price fluctuations on domestic and foreign markets, as well as the size of quotas that were established by the state [4].

Ukraine continues strengthening its influence on the world food market. In particular, to date the country is the world leading exporter of sunflower oil, in 2013/14 MY Ukraine confidently entered the TOP-3 of the world largest grain exporters and, according to experts, in 2014/15 MY the country will consolidate its positions. To date the food potential of Ukraine allows feeding nearly 150 mln persons in accordance with the minimum FAO standards. Generally, in the future Ukraine is able to feed at least 400 mln persons [3].

Thus, grain production is one of the main directions of agro-industrial complex of Ukraine. It is a very promising sector for development, but it feels strong lack of financial resources. A steady trend indicates some change in the priority sectors of the economy in the agricultural sector, as evidenced by the increased attention to this business of both investors and the state. For further development of the grain market it is necessary to stimulate market supply and demand for grain; improve its quality and protect interests of domestic producers in order to achieve higher competitiveness in the global market.

References

1. Doronin A.V. The current status of grain market in Ukraine [Electronic source]. // Access mode: https://docviewer.yandex.ua/?url=http%3A%2F%2Fbioenergy.gov.ua%2Fsites%2Fdefault%2Ffiles%2Farticles%2Fdoronin.pdf&name=doronin.pdf&lang=en&c=568bcfb3c002&page=1

2. Ukraine. [Electronic source]. // Access mode: http://www.fao.org/docrep/005/y2722e/y2722e17.htm

3. Ukrainian - American Agrarian Congress. March 24-25, 2015 [Electronic source]. // Access mode: http://www.apk-inform.com/en/conferences/ugc2014/usa/about

4. Teslyar V. Problems and prospects of grain and grain market in terms of Ukraine’s accession to the European Union [Electronic resource]. // Access mode: http://nauka.kushnir.mk.ua/?p=76059