One of the indicators, which most clearly reflects the current situation with investment, political and economic climate, is capitalization of public companies. As informed Association "Ukrainian Agribusiness Club” (UCAB), 15 Ukrainian public agricultural companies are currently represented on the world exchanges. For the last 6 months, this index has decreased on more than 1.1 bln USD (-22.2%), since October 2013 – on 2.5 bln USD (-39.1%), and at the end of August it totaled 3.9 bln USD.

Unfortunately, this trend does not stop and actually every agricultural company shows decreasing in the value of their securities. Thus, for the past half year the greatest decrease in market capitalization in percentage value was shown by the next companies: agroholding “Mria”, which just announced  technical default with decreasing on 472.5 mln USD (-66,9%), KSG Agro, which has recently been applied sanctions via exemption from the listing on the Warsaw Stock Exchange because of untimely submission of reports with decreasing on 19.5 mln USD (-57,9%), and Milkiland - to 45.5 mln USD (-49.3%). Increase in capitalization was shown by only one company – Ovostar – on 7.7 mln USD (+ 6.3%).

Volodymyr Lapa, Director General of UCAB said that capitalization of Ukrainian agricultural companies is now at the lowest level since 2009. "The military actions only partly explain this fact, - underlined Volodymyr Lapa, - together with this, for long time the business has been feeling impact of the political and macroeconomic instability, including the situation on the financial markets. Also, investors are not inspired by the permanent attempts of the Ministry of Finances to increase the tax pressure on agricultural producers. "

Alex Lìssìtsa, the President of the UCAB stressed that today Ukrainian agricultural sector is experiencing perhaps the heaviest times since 2004.

The reason for this is not only  the political situation, but rather baffling behavior of the Government concerning the further development of both the country and the agricultural sector. For example, for the last year the Government has already made the third time trying to change the tax system for agricultural sector. Complete chaos reigns in the land regulations and corruption is rampant in the bodies of state administration for agriculture, including the Ministry. This, of course, deters investors, both foreign and domestic, so lowering the capitalization of public companies in agricultural sector is quite understandable – investors simply do not believe in Ukraine. At the recent meeting of largest agricultural companies with the Prime-Minister they discussed the further development of the agricultural sector, and it was noted that agroindusty of Ukraine does not require government subsidies, but only asks to leave the same system of taxation for the next 5-7 years. Agribusiness representatives also ask to begin selling agricultural lands which are in the State ownership and eradicate corruption component, - underlined Alex Lissitsa. – And for all of this we have already no time, so the decision should be taken as soon as possible to save not only public agricultural companies, but the agricultural sector as a whole. "

Association "Ukrainian Agribusiness Club"  

3 floor, 146 Zhylianska Str.

01032 Kyiv, Ukraine

Phone/Fax: +380 44 2362097/79

kotyk@ucab.ua 

Tetiana Kotyk 

www.ucab.ua

The Association "Ukrainian Agribusiness Club" (UCAB) www.ucab.ua was founded in 2007 to protect the economic and professional interests of players of agribusiness in Ukraine. UCAB is a unique platform in Ukraine for establishing business contacts between the leaders of agribusiness, improvement their work and dialogue with the government. UCAB actively supports Ukrainian producers in establishing and maintaining international business relations. The Association consists of the largest producers and processors of agricultural products in Ukraine.