Soy in Ukraine
The soybean market is the one of the most dynamically growing markets in the Ukraine. Over the last few years the sowing area of soybean in the Ukraine has tripled and reached its maximum with 2,1 mio. ha in 2015. Such growth took place due to high crop profitability (after sunflower), high prices, foreign market demand and suitable geographical location.
We already know that during 2016, the soybean sowing area has decreased (by 14% or 300 thousand ha), first of all as a result of the increase in sunflower sowing area. It is not possible to analyse the soybean sowing area changes without considering other key crops.
In the case of the Ukraine, these are maize and sunflower, because their share in crop rotation has increased significantly over the last few years and has reached about 1/5 share of the total sowing area for each. This is critical from an agronomical point of view, taking into account that soybean and sunflower can’t be sown on the same land after each other, and that they have similar diseases. We can already see that treatments against Sclerotinia, for example, increased twenty times during vegetation as well as seed dressing.
Over the last 10 years, the number of soybean varieties registered in the State Register of Plant Varieties Suitable for Dissemination in the Ukraine doubled and eventually reached 161 in 2016. About 70% of registered varieties belong to the local selection. 97 different varieties were found in the amis® seed study (data for 2015 is the latest available).
The import and cultivation of transgenic seeds is not permitted in the Ukraine, but it is not prohibited and is not controlled. There are only few laboratories that could provide seed analysis for GMO in the Ukraine. It is possible that GMO seeds are imported as forage by experienced parties or international companies. As a result, these seeds became popular among farmers due to high profitability of GMO-soybean cultivation and easy growing (one glyphosate treatment during vegetation).
During amis® study we found GMO varieties and glyphosate treatments during crop vegetation. According to the Law of Ukraine on Consumer Rights Protection, products that contain GMO must be labeled. Nevertheless, if the share of genetically modified ingredients is smaller than 0,9 %, this can be distributed without such information on the label. This situation needs to be improved in the near future – allowed officially, or prohibited and controlled.
Production and export
The global soybean production is expected to remain on the same level as last year (316 million tonnes in 2016/17 marketing year), according to the data from the United States Department of Agriculture (USDA). The production of soybean in Brazil keeps increasing and has reached USA’s volumes. Other countries don’t show significant change. Ukraine is one of the top ten major soybean producers with 1% of the world’s market share. The country satisfies its domestic demand completely and exports more than half of the produced soybean each year (2,8 million tonnes in 2016/17 MY). The import of soybean products is driven by strong demand from China, EU countries, North Africa and the CIS region. The major countries buying Ukrainian soybeans and soybean products in 2015 were Italy, Egypt, Turkey and Iran. On average, the soybean yield in the Ukraine is about 20 centner/ha. Due to economic reasons and a lack of state support, farmers cannot follow the optimal technology for crop cultivation. As a result, budget deficit leads to destabilisation of the agricultural sector in general, and for soybean in particular. The average yield in the Ukraine is 30% smaller than the average yield in other top-producing countries. So for now there is good potential for an increase in the production that might be achieved by increasing the yield without any changes to the sowing area.
Crop protection market
Soybean is 4th among the largest crops in the Ukraine, after cereals, sunflower and maize. From 2013, we observed that intensification in the growing of this crop had increased – and that turnover increased more than the sowing area and reached 139 million USD in 2015 (data includes desiccation from 2011 and seed dressing from 2012). The main income in the crop protection segment for soybean in the Ukraine is achieved by herbicide products. It is the largest segment based on turnover and treated area. The vast majority of the sowing area is treated by herbicides at least once (NET area is 97%). On average, farmers provide 1,7 treatments using herbicides and use on average 1,4 products in the tank-mix, as a result, farmers used an average of 2,4 herbicides per hectare. Last year we observed an increasing trend in treated area using fungicides and insecticides that reached about 1/3 of the sowing area. Farmers used only one product in the tank and provided 1,1 treatment per hectare for fungicides and 1,2 – for insecticides. Due to high prices on active ingredients of fungicides this segment is more valid in terms of turnover.
Turnover and Coverage by main products types in soybean in the Ukraine 2014-2015
|Turnover (Mio USD )||81,5||83,3 (+2%)||12,4||19,1 (+54%)||5||5,8 (+16%)|
|NET treatment %||99%||96,5%||25,6%||34,2%||21,8%||27%|
Note: selective and non-selective herbicides (that were used during crop vegetation)
Over the last few years, intensity has increased due to the number of treatments and number of used products:
Dynamics for changes in the number of treatments and products in
soybean in the Ukraine 2009-2015
|Number of products per treated hectare (SDA/NET)||1,8||3,1||3,2|
|Number of treatments per treated hectare (TTA/NET)||1,3||2,1||2,1|
Note: seed treatment and non-selective herbicides not included
The crop protection market is still dominated by products from international producers, especially in the case of fungicides. International producers have kept stable shares in the soybean crop protection market and improved their shares in fungicide and insecticide segments.
Every year, the number of products on the market increases. 240 different products were found in the amis® CPP study in 2015, 17% more compared to 2013. More than half (133) of these products were herbicides, of which 104 were selective. The herbicide market is dominated by products containing Bentazone – about 1/3 of herbicide turnover is created by them. Metribuzin, Quizalofop-P-ethyl and Glyphosate-containing products are also popular.
Among fungicides, the most popular are products with a combination of active ingredients belonging to Strobilurin and Conazole groups (Pyraclostrobin, Picoxystrobin and Azoxystrobin or Epoxiconazole and Cyproconazole). 41 products were found in the study, but only 5 of them have an influence on the market situation (5 products covered 86% of turnover in 2015). Chlorantraniliprole is a market leader among insecticides based on turnover. Products based on Cypermethrin and Chlorpyrifos, Imidacloprid, Betacyfluthrin and Lambda-cyhalothrin are also popular. In general, 49 products were found on the market, but only five of them made more than half of the turnover. The share in usage of inoculants rapidly increased in the Ukraine. Thanks to high ecological and economical profitability, it is becoming more and more important for soybean cultivation. It is cheap and could result in a 10-30% harvest increase it is also a reason for many farmers’ success. About 80% of the sowing area was sown by seeds that were treated by farmers with inoculants – products that are based on nitrogen fixation bacteria. As a result, more than half of seed dressing turnover for this crop belongs to inoculants. In general, turnover for seed dressing reached 24 mio USD and was achieved by 87 products found in the 2016 study (amis® seed dressing study 2016).
The need for soybeans continues to grow based on a strong demand for animal feed worldwide and significant growth in demand for biodiesel feedstock. The current production of soybean in the Ukraine however, is still far from reaching its potential. In the near future we should select intensive or extensive types of growing for this crop, but the most important question is if it will be allowed to grow GMO. The machinery and technology used by the farmers is still in the early stages of development, thus there are opportunities for increase of soybean yields in the future purely by improving the technology used. Moreover, there is acreage growth potential, as the sowing area could increase up to 3 mio. ha (in comparison with the 2 mio. ha now).
Ukraine has been increasing its soybeans export for five consecutive years and it is expected to reach an all-time high in the next marketing year. Important is the fact that the country would like to decrease export and increase the processing of soybean. This means that soybean will be processed and sold not as a raw material, but as value-added products. This step is quite positive for the country’s economic situation. The demand for this crop is so high that it does not matter which way crop cultivation develops in the Ukraine (GMO-growing or not, intensive or extensive). There will be demand for the yield in any case.
PhD Business intelligence manager and client's support amis®
Kleffmann Group Ukraine, Kazakhstan and Belarus