At the beginning of this week the capitalization of Ukrainian public agricultural companies exceeded USD 3 billion. Before the global financial crisis, this figure reached USD 10 billion, later, by 2014, after a period of bankruptcies and acquisitions it stabilized within USD 6-7 billion. Last year the value of these companies fell by more than half and stabilized at USD 2,6-3 billion.

Companies that showed an increase in capitalization compared with last year: Kernel – the value reached USD 1.2 bln. (+ 119% compared with corresponding date of last year), Ovostar – USD 143.1 mln. (+ 18%) and Agroliga - 6.5 USD mln. (+ 6.5%). Companies that have the worst figures: Avangard – USD 66.4 mln. (-84%), Trigon Agri – USD 9.1 mln. (-59%) and Agroton – USD 8.8 mln. (-53%).

Certainly the increase of the level of capitalization is a positive signal for domestic agribusiness, but agricultural companies managed to gather a relatively high yield and improve their financial position, including debt restructuring, due to effective actions of management. Nevertheless, this does not change the general agribusiness environment. Although there are some positive points - deregulation in the sector, official reports on the opening of a land market in Ukraine, development of new financial instruments of borrowing, etc. - the general economic situation in the country remains quite risky for foreign investors.

In particular, uncertain situation with taxation of agricultural enterprises next year might significantly complicate the agribusiness environment, the level of corruption remains high, in addition, the depreciation of currency continues after the period of relative stability on the exchange market. Some international analytical agencies forecast the growth of the dollar rate to UAH 25 till the end of 2015 and establishment of the average rate at the level of UAH 31 in 2016. If a sharp increase in the rate will happen right before the sowing campaign – it will break the financial capacity of companies.

Association "Ukrainian Agribusiness Club" 

3 floor, 146 Zhylianska Str.

01032 Kyiv, Ukraine

Phone/Fax: +380 44 2362097/79

feschenko@ucab.ua 

Anna Feshchenko

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.