Ukraine’s export potential will bring it to the leaders of the global economy. However, today the state acts as the object of investing in agriculture and as a competitor in the markets for agricultural products, Andriy Hordiychuk, Chairman of the Board of Svarog West Group said, commenting on the prospects of the agricultural sector, UKRINFORM reported citing Investgazeta.

“Today we can say that in the next three – five years the agricultural sector will be a leader of the economy in exports. A number of factors suggest that Ukraine can feed the world and can do it better than others. The majority of Ukrainian agricultural companies are still focused solely on grain exports. But the future of the agricultural business in Ukraine is not that. Much more interesting is grain processing and production of meat, milk and other products and their subsequent export,” said the expert.

He notes that the agricultural policy of the state today does not encourage, unfortunately, the development of processing of agricultural products. However, there are already companies that are paying attention to it individually.

“In recent years, the market has shown that the vast latifundium, which deals exclusively with boosting grain exports, sooner or later will become ineffective, or, in other words – it is generally difficult to be effective. And the increase in the land bank without vertical integration is meaningless. Therefore, the market is being transformed and will be transformed further in this direction,” says Hordiychuk.

According to him, over the next three – five years, the profitability of grain exports in pure form will be reduced due to a number of factors – cost, regulatory risks and others. Therefore, in the long term, for example, Svarog West Group will move towards exports of flour, oil and meal from soybeans. This will help ensure stable profitability of the company.

“Also, in 2013 we will continue to implement a strategy to reduce the cost of cultivation of major crops (wheat, soy, corn) through precision farming and increasing the proportion of organic fertilizers. Therefore, the development of livestock is fully integrated into the process of improving the quality of crops. The effective use of these tools allows to increase profitability by 20-30% per hectare. Crops of the current and coming years will focus on the trends in the world prices for crops. In other words, our strategy of crops is a marketing crop rotation,” the company’s official emphasized.

He noted that this strategy will necessarily be aimed at preserving the yield potential of the land. That is, even if the crop is highly profitable, but does not fit into the agronomic laws of crop rotation – it will not be sown.

As for livestock, the dairy sector is actively developing. “Over the next two years we plan to increase the milking herd from 3,600 to 8,000 cows, investing about USD 10 million exclusively in the development of milk production. And in the future, we are going to deal with its processing. Ukraine “is doomed” to livestock and processing – the market just requires it, the analyst concluded.

ukrinform