Emerging Markets / November 29, 2018

Cereals Production and Economics in the Ukraine

The Ukraine is a semi-presidential republic and mid-sized country located in southeastern Europe. With a total territory of 603.550 square kilometers, Ukraine is almost the same size as Texas. Geographically, the country is dominated by fertile plains and plateaus as well as mountainous formations and 2.782 kilometers of coastline along the Black and Azov Seas. Currently, Ukraine has a total population of 44 million citizens, with an average age of 41 years. Furthermore, about 70% of the population lives in an urban setting, notably the capital city of Kyiv with its 3 million inhabitants.

Cereals Production and Economics in the Ukraine

The annual gross domestic product (GDP) of the Ukraine is US$370 billion (PPP) and the national economy experienced positive economic growth of 2.5% in 2017. As of today, the national economy is divided into 12% agriculture, 29% manufacturing, and 59% services. Meanwhile, the national labor force is divided into 6% working in the agriculture industry, 26% working in the industrial sector, and 68% working in services. Similarly, the national agriculture industry utilizes about 71% of the national territory, while another 17% is forested.

In terms of natural resources, Ukraine has iron ore, coal, manganese, natural gas, oil, salt, sulfur, graphite, titanium, magnesium, kaolin, nickel, mercury, and timber. Within manufacturing, the national industry is focused on coal, electric power, food processing, metallurgy, machinery, transport equipment, and chemicals. Simultaneously, the country’s agricultural industry has as main products grain, sugar beets, sunflower seeds, vegetables, beef, and milk.

In terms of trade, Ukraine is the world’s 53rd largest export economy. During 2016, the country imported US$37.8 billion worth of goods and exported US$35.1 billion, resulting in a trade deficit of US$2.7 billion. Furthermore, that same year, the country’s main export, representing 9.8% or US$3.4 billion of the total, were seed oils. On the other hand, Ukraine’s main import, representing 8.7% or US$3.3 billion of all international purchases, was refined petroleum. Meanwhile, Ukraine’s main trading partners are Russia, China, Germany, Belarus, and Turkey.

Unfortunately, in Ukraine, some 1.5 million people suffer from undernourishment. In recent years, the average per capita protein intake of animal origin amongst the Ukrainian population has been 42 grams daily. Simultaneously, land distribution and output in the country have evolved throughout the last half century.

Back in 1961, permanent pastures and meadows in Ukraine covered 7.47 million hectares, while arable land covered 33.3 million hectares and permanent crops covered 1.1 million hectares. More recently, by 2016, permanent pastures and meadows had increased to cover 7.8 million hectares, while arable land represented 32.77 million hectares and permanent crops accounted for 897.000 hectares.

Likewise, the domestic cereals market in the Ukraine has evolved during the last half century. Back in 1961, the country devoted approximately 12.5 million hectares of land to the production of cereals and produced 35.5 million metric tons annually. In 2016, the Ukraine devoted 14 million hectares of land to cereals production and yielded some 65.2 million metric tons.

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