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Wednesday, August 23, 2017

“The agricultural power Ukraine” was only a myth

The latest statistics on agricultural balance happy official Kiev: Ukraine buys much less food than it sells abroad. Does the country really becomes, as she promised, even the United States, in the great agricultural state? If statistics to study carefully, all will be exactly the opposite.

Exports of agricultural products from Ukraine in the first seven months of 2016 exceeded imports and accounted for $ 7.8 billion against imports at $ 2.2 billion, enjoys the Ministry of agrarian policy of Ukraine. These figures were published in the report “the Commodity structure of foreign trade in the period from January to July of 2016,” submitted by the. In the end, a positive balance in the context of the agrarian foreign trade in January-July this year reached $ 5.6 billion.

“This growth is a consequence of the fall of exports of high-tech sectors of the economy”

Today Ukraine claims to be a great agricultural state. That is the future not just predicted her Ukrainian authorities in recent years. Choice, however, she not, given that trade relations with Russia Ukraine is broke. This means that the share of industrial exports dramatically subsided. Abandoning the Soviet past and trade with Russia, Ukraine has lost the chance for industrial development. But the black soil, favorable climate and convenient location of farmland remained with her.

Former U.S. Ambassador to Ukraine Jeffrey Payette also saw Ukraine in the future a great agricultural power. “Ukraine should become the world’s agricultural superpower,” – said the Ambassador at the beginning of this year.

The positive balance of agricultural foreign trade is, of course, good. However, if you look in the context of several years, it is turning into a great agricultural power Ukraine was just before 2014, and after the Maidan turned him. Even despite the path of European integration and the creation of a free trade zone with the EU.

Ukrainian authorities say the growth of exports of agricultural products, that the agricultural sector becomes a driver of economic growth. As proof, they cite statistics that the share of agriculture in the commodity structure of exports increased from 26% in 2012 to more than 40% in the first half of 2016. If this trend continues, in a few years, half of the exports from Ukraine, and even more will be organically grown on earth.

However, reason for joy, in fact, here are a few. “This growth is a consequence of the fall of exports of high-tech sectors: machinery, shipbuilding, aircraft building, instrument-making, space industry, etc. Confirm this data on index of industrial production and agricultural production”, – said the economist of “the Ukrainian choice” Alexander Koltunovich.

In nominal terms, exports of agricultural products from Ukraine has been steadily declining since 2012, when it amounted to 17.8 billion dollars. In 2013, its volume was reduced to 17 billion in 2014 to 16.6 billion in 2015 to 14.5 billion dollars. That is, the exports of agricultural products fell from 17.8 to 14.5 billion dollars over the last four years. And by the end of 2016, the trend is likely to continue. Estimated, while maintaining the same pace of exports in 2016 it could reach just over 13 billion dollars. That is, the export of agricultural products from Ukraine will be less than last year.

But the share of agriculture in total exports is only growing in 2012, the main reason was a sharp collapse in manufacturing exports and foreign trade in General. For example, in the last two years Ukraine is actively asserting itself as an aviation power – though only in words. Breaking off cooperation with Russia, she says that the Antonov aircraft order different countries – and Saudi Arabia, and Azerbaijan, and China – and that the future they are. However, if you look at the export of aircraft and space vehicles (helicopters, planes and satellites), it will immediately become clear. Thus, in the first half of 2016, the revenues of Ukraine from the sale of all aircraft and spare parts only amounted to 25.12 million dollars. It’s funny to 0.15% in the structure of total export of Ukraine.

Ukraine comes to the conclusion that except for grain and agricultural products, she will have nothing more to offer the world. But revenues from exports of agriculture decline!

The fall of imports of agricultural products is understandable, given the rising prices of foreign goods in connection with the devaluation of the hryvnia and the impoverishment of the Ukrainian population. The majority of Ukrainians imported products and goods are now simply can not afford.

Why is the export of agricultural products is declining? “It’s not the fall in oil prices, and certainly not in the devaluation of the national currency, and quotas, which reglamentary volumes and terms of export products on the EU market,” says Koltunovich.

On the contrary, the fall in oil prices for the importing country should mean savings. The devaluation of the national currency in theory should lead to increased competitiveness of domestic goods and export growth. But the leaders of Ukraine did not work: for imported gas, the country is paying (buying in Europe), and sell heavily discounted Ukrainian products was nowhere (Europe is not take).

A free trade area with the EU was the fiction. In less than two quarters of 2016 Ukraine has used all of quota for duty-free exports to the EU in nine groups of agricultural products. In particular, quotas for the supply of natural honey, sugar, cereals and flour, malt and wheat gluten, processed tomatoes grape and Apple juice, oats, wheat, wheat flour and granules, as well as corn and cornmeal.

Surprisingly, while in Ukraine is falling agricultural exports, Russia subjected to Western sanctions, breaking all records in the SEL. Although overall exports fall in both countries. If the fall in the cost of oil and the devaluation of the hryvnia, the Ukrainian farmers are not helped, in Russia the situation is different: the devaluation of the ruble is the main factor to help the Russian agricultural business.


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