Ukrainian agricultural sector needs USD 9 billion in external financing in next year – Ukrainian Agribusiness

The Ukrainian Agribusiness Club Association (UAC) states that the Ukrainian agricultural sector needs USD 9 billion in external financing in the next 12 months.

This is stated in the message of the Ukrainian Academy of Sciences, reports Ukrainian News Agency.

"According to the assessment of UAC experts, agricultural producers of Ukraine need additional financing in the amount of about USD 9 billion in the next 12 months. This need is created by the impossibility of selling products for export and the need to prepare for planting crops for next year's harvest," the message says.

According to Roman Slastion, the General Director of the Ukrainian Agriculture and Food Processing Plant, as of the beginning of July, there are still about 20 million tons of grain and oilseeds from last year's harvest in the controlled territory of Ukraine, which are subject to export.

"That is, about 20% of last year's harvest has not yet been realized. In addition, the new crop of grain and oil crops is estimated at 65-70 million tons, of which 45-50 million tons are expected to be exported (including processing products). Thus, the total volume of up to export of this year's harvest, together with last year's leftovers, will amount to 65-70 million tons. At the current export rate of 2 million tons per month, Ukraine will export the available volume of grain and oilseeds for the next 32-35 months," he explained.

According to the expert, in fact, only 30-35% of the grain volume will be sold from the 2022 harvest during the marketing year.

At the same time, domestic prices for grain and oil crops have decreased by 40-50% compared to the pre-war level, i.e., in terms of value, revenue from the sale of this year's harvest for the 2022/23 marketing year will be about 20-25% of last year's.

"Without external financing in the form of bank loans or other financial instruments, farmers will not have the funds to harvest this year's harvest, pay rent to owners of land shares, and sow crops for next year's harvest," Slastion emphasized.

UAC urges the government to turn to external partners in order to attract the necessary funding and avoid deepening the global food crisis.

As Ukrainian News reported, in June, the export of agricultural products increased by 30% compared to May to 2.7 million tons.