Ukraine seeds sector keeps a watchful eye on security and supply chain issues

Ukraine, often described as the 'bread-basket of Europe' for its rich quality black soil, is the world's fourth-largest wheat exporter. With neighbouring Russia, it collectively accounts for some 25% of global wheat supplies.

Last year, Ukraine exported 17 million tonnes of wheat, up 30% on the previous year, mainly to Mediterranean countries, North Africa, and the Middle East. Shipments are usually lower this time of year, as it is between grain harvests. It also ships maize or corn and sunflower oil to many countries, in close competition with Russia, as well as Canada, the US, France, Brazil and Argentina.

Supply chain disruption and price volatility are now evident, with German multinationals such as Bayer and BASF, the latter entering Ukraine after its independence in 1992, keeping a close watch on the rapidly changing security situation in the region, and its potential wider business impacts on production and personnel from sanctions.

Inevitably, as both Russia and Ukraine have ports serving the grains and oilseeds trade along the Black Sea, logistics are a key issue. Finance, and road, rail and canal shipments of produce are all now adversely affected by the ongoing conflict. Spring sowing of seeds is likewise disrupted.

Neighbouring Belarus and Russia are also major exporters of potash and other fertilisers, and Norwegian company Yara has said that its global trade in fertiliser has been significantly impacted, with prices spiking on world markets, along with oil and gas prices.

EU seed trade evolves

In September 2020, the European Parliament Committee on Agriculture and Rural Development (AGRI) supported the recognition of equivalence of cereal seeds, maize and sorghum seeds from Ukraine to be admitted to EU farmer markets.

In 2011, Ukraine requested for recognition of equivalence of its seed certification system. The main buyers of Ukrainian seeds are Belarus (35%), and EU (31%), as well as Serbia (5%), Egypt (4%), Georgia (4%).

According to Ukraine agribusiness analysis agency APK-Inform, the key crops for seed exports from Ukraine are cereals (wheat, barley, corn), soybean, rape and sunflower. Seed trade to the EU goes mainly to Romania, Hungary, Germany, Austria and Poland.

Company profiles

The following companies are among those operating in the Ukrainian seed markets sector. France and Germany are particularly active.

Bayer opened a seed processing facility in Pochuiky, Zhytomyr region in 2018. The facility is the largest of its kind in Ukraine, and one of the largest in Europe, at USD 200 million, and is part of a long-term investment into expanding Dekalb corn seed processing in Ukraine.

It processes around 750,000 units of seed annually to supply 2,500 Ukrainian farmers with Dekalb corn seed developed using traditional breeding techniques. It employs around 85 permanent and 220 seasonal employees to support the processing, storage and timely distribution of corn seed.

Euralis Semence

Euralis Semence is part of the French agricultural group Euralis, which was founded in South-West France in 1936. The main activities are seed production, breeding, research and trading activities for corn/maize, sunflower, winter and spring rapeseed, sorghum, soybean; and food production.

Farmsaat Ukraine is a new subsidiary recently founded by the German company Farmsaat. The company's portfolio in Ukraine currently includes 9 corn/maize hybrid products.

KWS

By 1900, Germany-based KWS had already become a leader in world trade in sugar beet seeds and began to establish subsidiaries. In Ukraine, KWS built its first seed plant in 1905, known as the Vinnitsa seed plant.

In 2001, the subsidiary KWS-Ukraine was founded, which provides seed production, marketing and agro services. KWS offers 13 hybrids of sugar beet, 20 maize hybrids and high-performance of hybrid of sunflower, fodder beet, winter rape, rye, spring barley varieties and potatoes to Ukrainian producers.

Limagrain Ukraine

Limited liability company Limagrain Ukraine was founded in October 2008, a subsidiary of Limagrain Europe S.A. (France).

Pioneer

Corteva's Pioneer entered Russia and the Ukraine with research plots which were established in Chernihiv region and neighbouring Russia. In 1998, Pioneer opened its representative office in Kiev and commenced work on testing new hybrids for maize and sunflower. In 2010, the company officially announced the opening of a fully functional research centre in Lyubartsi (Kiev region).

Ragt Semences-Ukraine

Limited liability company RAGT Semences-Ukraine was created in 2010. The founder of the company is RAGT Semences (France), established in 1919. The company has 18 branches and more than 1,000 highly qualified employees only in Europe.

Remington/MAS Seeds Ukraine

US company Remington Seeds has purchased the seeds business of French company Mas in Ukraine. In mid-September 2021, Indiana-based Remington launched the first stage of construction of a corn/maize seed production plant in the village of Helmiaziv (Cherkasy region) of Ukraine. The plant would be worth an estimated USD30 million when completed.

Mas Seeds Ukraine, now Remington, was a Ukrainian subsidiary of the French seed company Mas, which in turn is part of the agricultural cooperative group Maisadour. Its seed processing factory, located in the Dnipropetrovsk region, has a production capacity of 1 million sowing units per year.

90% of corn/maize seeds and 50% of Mas sunflower seeds sold on the domestic market were produced in Ukraine. Other seeds are imported from factories located in France and Spain.

Syngenta

Construction of a sunflower seed processing plant was recently completed in Ukraine. The company has an office based in the capital Kiev.

T.V.K. Agriculture (Farmer) Enterprise is an enterprise in Kiev region, founded as a family company in 2000. It is active in production of seeds for winter wheat, soybean, and other bean crops.

Posted 08 March 2022 by Alan Bullion, Director of Special Reports & Projects, Agribusiness, S&P Global Commodity Insights

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.