In 2020, Ukraine has harvested almost a third less harvest than a year ago. This threatens with big problems for the country’s economy.
2019 was a record year for Ukrainian farmers: the total grain harvest amounted to at least 75 million tons. And in terms of their exports, Ukraine has overtaken even Russia.
Naturally, the forecast for this year was the same. But the second time, the miracle did not happen: in April, the Ministry of Economy and Trade lowered the bar to 60 million tons.
In fact, they collected a little more than this value.
Grains threshed to date:
- 25 million tons of wheat.
- 26 million tons of corn.
- 7 million tons of barley.
Oilseeds:
- 13 million tons of sunflower.
- 3 million tons of soybeans.
Why was 2020 a bad year?
Mostly due to drought. In a number of Ukrainian regions (Odessa, Kirovograd, Vinnitsa, Poltava, Chernigov), up to 80% of the crops burned down due to the heat and lack of precipitation.
Experts say that due to climate change, Ukraine urgently needs an irrigation system. But who and when will create it, for what money is still a mystery.
Will the farmers survive the crop failure?
On the one hand, although 2020 is worse than 2019, the harvest indicators are far from catastrophic.
On the other hand, many Ukrainian companies actively trade forward obligations using futures, attracting money from abroad.
What should a Ukrainian enterprise do, which has signed a contract for the supply of 10 thousand tons of wheat, but actually grew only 6.5 thousand tons?
And there are many such «non-executable» contracts in the country.
The farmers hoped that dollars and euros from foreign partners would help them develop faster, but in the end they found themselves in a difficult situation.
Reputational losses were added to financial losses. And this is not to mention the fact that the income from the export of agricultural products is 40% of the budget of Ukraine.
At the same time, as the head of the Ukrainian Grain Association Sergey Ivashchenko noted, there is room for growth: Ukraine may well raise grain production to 100 million tons within a few years.
And in any case, there is definitely no threat of hunger: Ukraine produces at least three times more food than it consumes.
