Ukrainian Corn Seed Flows to Europe in Further Farm Trade Shift: Reuters
Ukraine has rapidly expanded its exports of corn seed to the EU in the past two years, adding to European farmers' grievances about unfair competition from Kyiv, reports Reuters. This shift, a rare bright spot for Ukraine's war-hit agricultural sector, comes as Kyiv leverages free trade terms granted by the EU following Russia's invasion.
The move has partly reversed the EU's longstanding seed exports to Ukraine, injecting income into the country's struggling farm industry. Ukraine's total seed exports, mostly for corn (maize), reached $121 million last year, compared to just $22 million in 2021, according to the Seed Association of Ukraine. The country's share of the EU corn seed market has jumped from zero to around 10% since 2021, estimates French corn growers' group AGPM.
While seeds represent a small fraction of Ukraine's overall agricultural exports, they offer farmers significantly higher profits than bulk crops. A metric ton of corn seed can be sold for $3,900, compared to $200 for one ton of corn, according to Ukraine's agriculture ministry. This more than offsets higher production costs, estimated at $1,800 per hectare for seed versus $900 for grain.
The EU, a strong supporter of Ukraine in the conflict, gave regulatory approval for Ukrainian corn seed imports a year before Russia's invasion. However, the influx of agricultural products from Ukraine has drawn criticism from European farmers struggling to compete with lower-cost Ukrainian goods.
In response to farmer protests, the EU has introduced import curbs on some Ukrainian agricultural products this year, including sugar, eggs, and corn grain. The EU continues to monitor agri-food exports from Ukraine, according to an EU spokesperson.
France, the EU's biggest seed exporter, has seen its seed trade surplus with Ukraine shrink significantly. Its seed trade surplus with Ukraine fell from 100 million euros ($108 million) in 2020/21 to 41 million euros in 2022/23, according to seed sector body Semae.
Ukrainian authorities and industry insist that their aim is to cover more of their domestic demand rather than maximizing exports. The country is still reliant on imports for oilseeds, with imports in January-September reaching $346.5 million, according to customs data.
"We have a huge potential for import substitution," Agriculture Minister Vitaliy Koval told Reuters.
International companies like Corteva, Maisadour, and Bayer established farm networks and seed processing facilities in Ukraine long before the war. The conflict has led to a significant decrease in domestic seed demand, with Ukraine's corn planting area dropping by a quarter. Additionally, the Russian market, which some firms supplied from Ukraine, is no longer accessible.
Despite these challenges, companies like Bayer and KWS have invested tens of millions of euros to expand their processing facilities in Ukraine. Farm operator HarvEast has increased its area devoted to seed production by 20% this year and plans a similar increase next year, according to CEO Dmitry Skornyakov.
Ukrainian farms benefit from lower labor costs and larger acreage compared to the EU. This makes it more worthwhile to invest in specialized machinery needed for seed production, according to Skornyakov.