Tuesday, February 14, 2017

Agriculture to lead Ukraine's recovery

Bloomberg:

(snip)

Exports of wheat, barley and sunflower oil are at or near all-time highs, part of an agricultural revival that began to take hold in 2013. The industry’s rise coincides with declines in export mainstays such as steel and iron ore, which are produced largely in the nation’s east and have suffered amid the conflict there with Russian-backed insurgents. Trade data due Tuesday are set to underline the shift.

(snip)

Agriculture’s ascent may only be starting. Irrigation projects could help boost the grain harvest to 100 million metric tons from 66 million tons, according to Agriculture Minister Taras Kutovyi, who hasn’t provided a timescale for the increase. Other potential drivers include canceling a ban on selling farmland, a requirement of the nation’s $17.5 billion bailout from the International Monetary Fund.

The shift can be seen in Ukraine’s goods exports, more than 40 percent of which are now agricultural products, while the share of ferrous metals has shrunk to a quarter. Ukraine, a country of 45 million people, could one day produce enough food to feed half a billion, Kutovyi predicts.

This is exactly why I own both Astarta and Agrocom (both trade on Warsaw exchange). Long term it will get progressively more difficult to feed the worlds population. Ukraine agriculture is extremely underdeveloped and has not made huge productivity gains since Soviet times. As capital and modern techniques are applied I expect big things long term.

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