Andrey Kim

Andrey Kim Andrey Kim - Analyst of agricultural inputs market at Consulting Agency “UkrAgroConsult” (Kiev, Ukraine) since 2009.

His main focus is analysis of trends and structure of Ukrainian agricultural inputs market, including seeds, fertilizers and plant protection sectors. He has conducted numerous market studies and has many publications in Ukrainian agribusiness media.

 

 

Biography:


Andrey holds Specialist diploma from Donetsk State Technical University (2001) and Master degree in Economics from Kyiv National Economic University (2006).

 

 Analyst's publications:

 

Ukraine. Will sugar prices increase?

29.03.2016

In March the sugar market was relatively shakey. Not so long ago UkrAgroConsult stated its opinion, with cautious optimism, on sugar beet acreage. However, last week market conditions were quite contradictory.

 Full article

Ukraine will press Europeans in the world seed market

03.07.2015

On June 4, 2015 the EU Commission finished its work for assessing the system of official control and certification of cereal seeds and their equivalence to the EU requirements. The final conclusions will be published in the first quarter of 2016.

 Full article

Sowing of winter crops in the new reality of inputs

23.09.2014

Sowing of winter crops for the harvest of 2015 began with a significant increase in the cost of inputs and decrease of the manufacturer margin. We will consider some of the costs to understand their role in the cost structure.

Fuel. The price of diesel fuel in mid-September 2014 amounted to about 16.10 UAH/l, which is 56% higher compared to 2013 (September 2013 - 10.30 UAH/l).

Mineral fertilizers. Prices for ammonium nitrate in September 2014 increased by 52% compared to September 2013 (2950 UA/ton) And amounted to about 4500 UAH/ton.

Seeds. Average prices for winter barley 1 reproduction increased by 13% compared to September 2013 (2750 UAH/ton) and amounted to 3100 UAH/ton.

Average prices of winter wheat 1 reproduction increased by 19% compared to September 2013 (2670 UAH/ton) and amounted to 3180 UAH/ton.

Average prices of winter rape seeds F1 (grown in Ukraine) increased by 7% compared to September 2013 (1250 UAH/s.u.) and amounted to 1340 UAH/s.u.

 

September 2013

September 2014

Winter rape seeds, F1 - th.UAH/s.u.

1,25

1,34

Winter wheat 1 reprod. — thousand UAH/t.

2,67

3,18

Winter barley 1 reprod. — thousand UAH/t.

2,75

3,10

 

Prices of seeds imported to Ukraine dependent on the exchange rate:

- NBU exchange rate USD/UAH (on 15.09.2014) - 12.9882 – increased by 62.5% (September 2013 7.9930);
- NBU exchange rate EUR/UAH (on 15.09.2014) - 16.7690 - increased by 57.8% (September 2013 10.6267).

To increase the competitiveness some manufacturers offer their own exchange rate, which is lower than the official one. The cost of imported seeds increased by 30-50% compared to September 2013 only due to exchange rate differences.

 

22092014

Despite the fact that this is only a part of inputs costs, the data illustrates the current picture of the sowing campaign. Under these conditions, the behavior of farmers and other agricultural producers will undoubtedly be modified accordingly.

Large companies and agricultural holdings are in a better situation than other farmers due to greater financial headroom. How long it will last remains to be seen. The absence of crediting and financial reserves will significantly narrow the choices for the rest of participants. The first choice - a decrease in fertilizer application, the use of plant protection products, purchase of cheaper seeds for stable areas.

Next one - reduction of the areas with following all agro technologies (application standards of fertilizers, plant protection products, seeds, etc.). And third, for those who do have access to cash resources, is the decrease of areas, application standards and seed quality. As a result, high probability in 2015 of quality deterioration and winter crops harvest reduction.

Perhaps this situation will be softened by the commodity crediting and loans within the partnerships. This tool has proved itself in 2008/2009, when the exchange rate of the national currency decreased by 50-60%. But such loans will be granted only to regular customers with a good reputation.

According to UkrAgroConsult estimates, the decrease in areas under winter grains in 2015 is either not expected (optimistic scenario) or forecasted to be slight up to 5% (pessimistic scenario). It should be noted that as of September 22, the situation unfolds by the first scenario.