2017-2022: Development and modification of agribusiness strategies. Factorial analysis

20.03.2017

The role of agriculture in Ukraine’s economy increases from year to year. In 2016, agricultural production accounted for roughly 42% of total exports from Ukraine.

In general, the Ukrainian grain and oilseed sectors are export-oriented ones. Among the top grain exporting countries, only Argentina and Ukraine export more than half of their grain harvests.

Export share in grain production, 2016

Export share in grain production, 2016

Ukraine’s agricultural market is being shaped by the following positive trends:

  • Transforming the agricultural production from labor-intensive into capital-intensive one.
  • Land Market as a driver for intensive M&A in agrarian sector  
  • Effective access of Ukrainian agricultural produce to the global markets.

The factor of investments played a decisive role in business development as recently as 5-7 years ago. In the current situation, the weight of this factor is overestimated. It is a common prejudice that high investments by themselves inevitably are coupled with high business margins.

However, in the present-day conditions, there is no direct dependence between major investments and high profitability of projects. A new factor determining business performance is unlimited access to global markets and then to regional ones.

Access to markets could be limited by stronger competition. Highly realistic are predictions of intensive competition in the grain and oilseed markets with possible declining access to global markets for Ukrainian produce. This aggravates agribusiness risks in Ukraine.

UkrAgroConsult Analytical Center is offering agricultural market participants the study “2017-2022: Development of Ukrainian agribusiness strategy. Investment Climate. Factor analysis”.

The study’s conclusions and recommendations serve as tools for reducing risks and optimizing business strategies.

Contents

Summary

Methodology of the Studying and forecasting

  1. Key trends of the global market and Open Economy of Ukraine 
    1. Paradox of the 21st century: Cheap commodities against world economy stagnation.
    2. Geopolitical factors in shaping the global value chains  
    3. Regionalization as the global economy’s key development trend: impact over Ukrainian economy
  2. Ukraine: Enhancing business competitiveness as a response to new challenges
    1. Ukraine: Capital Incentive farming vs. Labor Incentive farming.
    2. Margins as key drivers of structural changes in agrarian sector of Ukraine. Official bank sector and alternative financial system
    3. Land market and Intensifying Mergers and Acquisitions in the Farming Sector. Small and medium-sized farms vs. agri holdings. Monopolization trends in the agrarian sector.
    4. Agrarian policy and access of Ukrainian ag produce to the global markets under highly     competitive environment.
    5. Analysis of the modern value-chain in Ukrainian agrarian production  
  • inputs suppliers
  • farming sector
  • traders, intermediaries, logistics
  • processing companies
  1. Key results of the factor analysis. Conclusions and recommendations.
    1. Strategies of Ukraine’s agribusiness: availability of instruments and their relevance?
    2.   Investments Climate in Ukrainian agrarian sector. SWOT Analysis 
    3. Short -, mid- and long term grain and oil crops forecasts  

 

 

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