Published: 2021
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This report presents the current situation and an outlook for the major Ukrainian agricultural commodity markets until 2030 along with the update of the Ukraine country model in AGMEMOD. AGMEMOD is a system of partial equilibrium, medium-term, dynamic, multi-market and multi-country econometric models that is applied for generating projections for agricultural commodity markets of the EU and neighbour countries. In the current work, the database of the Ukraine country model in AGMEMOD has been updated to 2019-2020, the behavioural functions representing market agents re-estimated, and the beekeeping and bioethanol sectors included. The outlook rests upon a set of information and assumptions that were available and considered most plausible at the time when the analysis was conducted. For the projections, the continuation of current agricultural and trade policies in Ukraine is assumed, as well as coherent external projections that assume steady growth of the economy, declining population, increasing crude oil prices, improvement of crops and livestock production technologies, and moderate positive development of the world market prices for agricultural commodities. The cumulative impact of these macroeconomic developments is captured in the projections of agricultural markets in Ukraine. The outlook results for 2030 show that while the quantity of wheat produced will increase only marginally, maize is expected to become the dominant cereal in Ukrainian agriculture. Adaptation to climate change is the main driving force behind this trend. Domestic soya beans, rapeseed and sunflower seeds production will continue growing, along with the quantities of oilseed oils and meals. Although the further developing domestic poultry sector will drive feed demand, Ukraine will continue to be a net exporter of cereals, oilseed oils and meals. Cattle and swine farming will continue its ongoing structural change that shows the replacement of selfsubsistent producers (rural households) by specialised farms. However, the specialised larger producers will not compensate the loss in animal numbers from the rural households and, therefore, production quantities of beef and pork are likely to slow down in the next decade. Conversely, poultry meat and eggs production are projected to grow. Concentrated in large enterprises, the production of poultry meat is projected to increase by more than 30%, and of eggs by more than 50%, followed by growth in exports. Compared to the latest OECD-FAO agricultural outlook, the AGMEMOD outlook might be considered rather conservative for several Ukrainian sectors. Main reasons behind the differences of the two outlooks are discrepancies in the underlying databases, exogenous variables, and the weight given to the trends of the last decade. In this respect the two outlooks together may provide a span for the possible future developments of the Ukrainian agricultural sector by 2030. As the COVID-19 pandemic has been ongoing since early 2020, this report also analyses its impacts on the Ukrainian agriculture. The analysis demonstrates medium to long term resilience of the Ukrainian agricultural commodities production and export to this crisis. Overall, the current report shows that AGMEMOD provides relevant results and enables a structured discussion about key development trends, changes and causes of changes in production and trade of agri-food commodities. However, to guarantee solid and reliable simulation outcomes also in the future, careful calibrations of model parameters and assumptions, as well as validation of the model's outcomes are required. Therefore, not only the Ukraine country model of AGMEMOD has to be further developed, but also the network of local modelling teams and market experts should be continued to be strengthened.
