Further Ukrainian grain quality improvement is largely determined by new information environment

10.08.2016

Ukrainian grain business pays more and more attention to the latest information technologies and their role in competitiveness improvement in the global market.

Information on grain quality, reputation of supplier/country of origin becomes the main factor of competitiveness and securing a foothold in markets. UkrAgroConsult is confident that the new approach to market data interpretation will provide the expansion of contract farming/production use for quality control at all stages of commodities production and promotion on markets.

Information problem is not new for Ukrainian market. It is well known that presently insufficient attention is paid to grain quality inspection directly in fields, and grain phytosanitary inspection is conducted already on board. As a result, grain consignments have average quality and, accordingly, average price, which could be higher.

This situation creates additional risks for exporters due to information delay on target market of the particular vessel, and due to lack of data on crops/grain phytosanitary conditions directly in fields.

Field inspections and provision of results in advance by means of various services may become a real way to deal with this acute contradiction. This will help to reduce purchases from regions of concern and form grain lots with necessary quality for particular buyers.

Certainly, grain cultivation using appropriate technologies is more effective tool to improve the quality and eliminate claims for fungal and other diseases. Nowadays such technologies are well known and available, but they require additional direct costs from farmers.

One of the possible ways to solve this problem is creation of a special map of Ukrainian fields with detailed phytosanitary conditions characteristic based on fields inspections by competent experts. Traders and exporters will be able to use this map to generate grain lots in accordance with requirements of particular customer/buyer.

Moreover, the information from inspectors may serve as a basis for adjustment of grain prices, delivered from silos of this particular region. Price fluctuations are likely to become even more effective way to increase farmers' responsibility for compliance with agricultural technologies, grain quality and phytosanitary conditions.

Traders’ community is even ready to develop and implement a mechanism for financing inspections of all 20-25 Ml ha, where grain crops are cultivated. What is more, according to preliminary estimates, the amount of funding will not be exorbitant. Exactly detailed and professional information will create preconditions for significant additional gain in prices, and therefore, generation of additional revenue for both exporters and farmers.

Certainly, field inspection project may be carried out only in case of close coordination with relevant governmental authorities, responsible for grain phytosanitary conditions for both domestic and foreign markets.

Significant expansion of the information sphere is considered by business as a critical factor for further Ukrainian agricultural sector development. UkrAgroConsult experts note this trend not only in activities for grain quality monitoring, but also in traders’ community in general.

UkrAgroConsult specialists believe that consideration of specific quality requirements of customers/buyers and negation of goods uncertainties will become additional drivers for growth of demand for high-quality Ukrainian grain. And this will certainly require creation of a highly professional information environment in Ukrainian agricultural sector.

Sergey Feofilov
Director General
UkrAgroConsult

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