Groats and Flour market of Ukraine

05.05.2018

Groats and Flour market of Ukraine.

 

General development trends in the grain and groats markets, analysis of production trends, the export dynamics and pattern, the identification of key players.

 


  

Updated May. 05, 2018

 

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The study “Groats and Flour market of Ukraine” comprises general development trends in the grain and groats markets, a detailed description of the development prospects and capacity of the food industry segments as the main consumers of flour, groats, and other processed products. The important aspects elucidated by the present study include analysis of production trends, the export dynamics and pattern, the identification of key players in the flour and groats market, and analysis of some other related markets. A special focus is put on reviewing legislation and adopted standards, which influence the groats market development significantly..

 


 


 

The study covers the following key points and issues:

  • wheat yield and production
  • supply and demand balance for rye
  • barley production
  • corn growing
  • dynamics of prices for buckwheat and buckwheat groats
  • dynamics of oat production in Ukraine
  • general trends in flour production
  • key players in the flour market
  • range of flour types produced in Ukraine
  • general trends in the groats market
  • specific features of production of corn, wheat, buckwheat, barley and oat groats
  • potential, geographic range, and dynamics of groats exports
  • peculiarities of bread production
  • production of pasta and instant foods
  • peculiarities of the confectionary industry.

     

Most important points in the latest update:

 

Upward trends in grain yields

Ukraine has substantially increased grain production over the last decade. Wheat, corn, and barley are the key grains, which account for most of the Ukrainian grain crop. The cropping pattern has changed substantially in the past five years, involving a substantial decrease in plantings of barley, oats, rye, and minor crops in favor of corn. With relatively stable sown areas, grain production has risen considerably due to higher yields.

 

grain crop

Source: UkrAgroConsult’s estimate
 

 

Analysis of the condition of Ukraine’s groats market

Groats and meals cooked on their basis are quite popular in Ukraine. The demand for groats lately gets still stronger due to the emerged fashion for healthy nutrition and the desire of people to lead a healthy lifestyle. The regional pattern of groats producing facilities shows that they are concentrated mostly in Kharkiv, Cherkasy, and Kyiv regions. The latter account for a combined some 50% of their total output, similar to the top 10 producers.

regional groats production
 

Peculiarities of bread production

The bakery sector is one of the most stable ones in Ukraine’s food industry. Bread is considered as the main socially significant food product in the country, therefore the financial status of bakers is substantially affected by the regulation of prices for key types of bread the regional state administrations impose through limiting margins or setting price ceilings. The bakery product market trends will be influenced by new developments in the trade and food market, primarily by those related to health promoting attributes: a fresh, warm product of one-meal size, consumer size foods, whole-meal and yeast-free foods etc.
 

Peculiarities of the pasta market

Pasta products are supplied to the Ukrainian market by both large and medium sized/small factories. Part of these foods come via charity foundations, religious missions as humanitarian aid. In addition, a serious negative impact is exerted on Ukraine’s pasta market by adverse factors presently observed in the country’s social and political domains: a hard overall economic situation that is pulling down real earnings of the population. Due to  the economic difficulties in Ukraine, devaluation of the hryvnia and, consequently, a drop in  paying capacity of people, the market’s growth can be forecast to slow down or even to slightly dwindle.

 

Description of confectionery production

The core of confectionery production is accounted for by operating production facilities concentrated within 30 major companies and some 670 medium-sized and small ones. The Ukrainian confectionary market is actually full. In the conditions of tough competition, the Ukrainian companies keep a close eye on buyer preferences and widen the range of products. Still, as Ukrainian sweets are in demand abroad as well, competition with foreign confectioners aggravates too.

 

Regulatory framework of the groats market

The main state policy tool in the sector of grains and grain products is the regulation of the domestic food market and foreign trade. The framework acts governing the operation of grain product companies are the Law of Ukraine “On Grain and the Grain Market in Ukraine” and the Law of Ukraine “On Underlying Principles and Requirements to Food Safety and Quality,” which came into force in September 2015. Clearly established responsibility of market players for violation of the food safety regulations within the scope of their activity is the cornerstone of the new legislation. The absence of permanent government control over current operation is offset with an increase in responsibility of market participants themselves for the quality and safety of their products.


 

Subject rationale:

The development of Ukraine’s groats market is increasingly focused on exports. In 2017, groats exports were up 30% from the previous year. Egypt, Belarus, Israel, the EU are interested in supplies of these products. Groat crops such as millet, buckwheat, oats, and rice occupy almost 500 Th ha of cultivated land in Ukraine. The advance in exports creates prerequisites for further development of food processing plants in Ukraine.

The present study contains an in-depth analysis of the national groats market represented with the main raw material crops: wheat, rye, barley, corn, buckwheat, and oats. It exposes key trends of the grains and groats markets, as well as the impact of national and international regulatory acts on the groats market development.

The economic crisis that began in Ukraine in 2014 caused a change in the Ukrainian grain production trend. Farmers applied less mineral fertilizers to grain crops for the 2015 harvest, and cut the use of expensive foreign seed, particularly corn. The above entailed a decrease in yields of staple grains. The upward trend in grain yields restored in 2016.

Geographically, three regions of Ukraine account for some half its total groats output.

Bread baking is one of the most stable sectors in Ukraine’s food industry. The bakers work on both Ukrainian and imported raw materials. The former include flour, sugar, sunflower oil, cooking fats, table margarines, and egg products, while the latter are food additives and mixtures of vegetable fats. It is small bakeries that most actively respond to new bakery market trends and, as small businesses, easily reorganize their operation.

The domestic confectionary market is actually full. In the conditions of tough competition, the Ukrainian companies keep a close eye on buyer preferences and widen the range of products. Still, as Ukrainian sweets are in demand abroad as well, competition with foreign confectioners aggravates too.      ПОВТОР!

The main state policy tool in the sector of grains and grain products is the regulation of the domestic food market and foreign trade. To set up a control system throughout the food production and distribution chain, the Law of Ukraine “On Underlying Principles and Requirements to Food Safety and Quality” obliged market participants to keep a track according to the “one step backwards, one step forwards” principle from September 20, 2015 on. This means they must be able at any moment to present information at the regulatory authority’s request on their raw material suppliers and finished product buyers.

The framework acts governing the operation of grain product companies are the Law of Ukraine “On Grain and the Grain Market in Ukraine” and the Law of Ukraine “On Underlying Principles and Requirements to Food Safety and Quality,” which came into force in September 2015. Clearly established responsibility of market players for violation of the food safety regulations within the scope of their activity is the cornerstone of the new legislation. The absence of permanent government control over current operation is offset with an increase in responsibility of market participants themselves for the quality and safety of their products.


 

Contents:

1. Grain market trends

  • 1.1. Wheat
    Ukraine. Grain supply and demand balance
    Ukraine. Gain plantings pattern
    Dynamics of wheat plantings, yields and crop
  • 1.2. Rye
    Ukraine. Grain supply and demand balance
    Ukraine. Gain plantings pattern
    Dynamics of wheat plantings, yields and crop
  • 1.3. Barley
    Ukraine. Grain supply and demand balance
    Ukraine. Gain plantings pattern
    Dynamics of wheat plantings, yields and crop
  • 1.4. Corn
    Ukraine. Grain supply and demand balance
    Ukraine. Gain plantings pattern
    Dynamics of wheat plantings, yields and crop
  • 1.5. Buckwheat
    Ukraine. Grain supply and demand balance
    Ukraine. Gain plantings pattern
    Dynamics of wheat plantings, yields and crop
  • 1.6. Oats
    Ukraine. Grain supply and demand balance
    Ukraine. Gain plantings pattern
    Dynamics of wheat plantings, yields and crop

2. Flour market

  • 2.1. General trends in flour production
  • 2.2. Key players in the flour market,
    Top 10 of Ukrainian flour producers
  • 2.3. Range of flour types produced in Ukraine

3. Groats market

  • 3.1. General trends in the groats market
  • 3.2. Corn groats
  • 3.3. Buckwheat groats
  • 3.4. Wheat groats
  • 3.5. Barley groats
  • 3.6. Oat groats

4. Development trends and capacity of the food industry segments as the main consumers of flour, groats, and other processed products.

  • 4.1. Bread production
  • 4.2. Production of pasta and instant foods
  • 4.3. Confectionery production

5. Review of legislation influencing the market development


 

Conclusion:

The climate conditions in Ukraine make it possible to cultivate all staple grains and obtain crops far exceeding domestic consumption. This suggests there is domestic demand for flour, in particular wheat, rye, corn ones, as well as for flour mixtures.  

 

Various types of groats (those from corn, buckwheat, oats, wheat, barley) become increasingly popular with the population of Ukraine owing to the present trend towards healthy nutrition and the desire to lead a healthy lifestyle. This promotes the development of healthy competition in the domestic market and pushes up production.
 

 

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