US Crop Producers Eye Ukraine Market

KIEV, Ukraine -- Two of the world’s largest producers of agriculture products are seeking to launch production of high-quality seeds and other farming technologies in Ukraine to help the nation double its harvests.

Dupont Pioneer, a leading US developer and supplier of advanced plant genetics, has announced that it will invest more than $40m into construction of a domestic seed production facility.

Monsanto, also from the US, is eyeing similar possibilities, with an announcement expected in December.

Due to be completed in time for the 2013 season, Dupont Pioneer’s new facility will support the increased customer demand for Pioneer brand maize, sunflower and oilseed rape hybrids in Ukraine, Russia and the broader region.

“This investment will further expand our efforts to grow our business in one of the most productive maize, sunflower and oilseed rape growing regions of the world,” said Jeff Rowe, Dupont Pioneer’s regional director.

Ukrainian government officials said Monsanto could also announce plans to commence domestic crop production.

“Monsanto’s business is strongly aligned with Ukraine’s farm industry and government objectives for productivity and exports – to increase grains production [from a current 40-50 million tons] to 80-100 million tons, which will further strengthen the export position of Ukraine,” said Michiel De Jongh, regional head of business development.

“This will become possible, if Ukrainian farmers are able to choose the best seeds and have access to innovative farming technology.”

Some of the world’s largest grain traders – including Cargill, Toepfer, ADM and Bunge – entered the Ukrainian agriculture market more than a decade ago.

They have since invested billions of dollars into storage, processing and logistics facilities.

Although Ukraine is of the world’s largest exporters of corn, barley, wheat and other grains, inefficient farming techniques – including the usage of low-quality seeds – have kept yields for some crops at less than half of the EU average.

Ukraine prohibits use and sale of genetically modified organisms, but higher-quality seeds and farming technology could sharply boost yields.

“Pioneer sees Ukraine as one of the fastest agricultural growth markets in the world and an important player in the global food security issue,” said Csaba Molnar, Dupont Pioneer’s commercial director in Ukraine and Russia.

“Ukrainian agriculture is rapidly modernising . . . We are confident that Ukraine is able to reach the ambitious government goal of 80m metric tonnes of grain by 2015,” Mr Molnar added.

By luring in more investment and modern farming technology, the country could double its production of grain and oilseeds, according to the European Bank for Reconstruction and Development – which has supported this goal by pumping nearly $1.5bn in financing into domestic agribusinesses.

American agribusiness and food sector consultant George Logush, a former vice-president at Kraft and Ukrainian poultry producer MHP, said: “Ukraine will ultimately become the bread and meat basket of Europe.”

Source: ft