Ukraine - the largest producer of soybeans in Europe

Source

APK-Inform

7748

During five recent years we have witnessed developing of the certain soybean boom. Everybody knows about the reasons of such rapid rates of development of the soybean market in the world and Ukraine. However, recently a growing number of participants of the European market have preferred purchasing soybeans of traditional selection, because of the growing demand from consumers of soy by-products. Ukraine as the agrarian country, with the high potential for soybean production growth, has the best chance to increase the supply of non-GM soybeans to the EU countries. The association "Danube Soya" is one of the organizations, which provides significant attention to the issues of development of the soybean market. Matthias Krön, President of the association, kindly agreed to talk about the principles of work and his vision of the future of Ukrainian soybeans on the European market.

 

- Mattias tell me, please, when your association "Danube Soya" was founded, and what motivated you to create it?

- Danube Soya was founded in 2012 in Vienna by 20 members from soya farming, seed production, collection, processing, usage and NGOs. The idea was to create a common standard for European Soya from the Danube Region and a common brand for producers and users of soya – the development of a “Branded Commodity” with higher value and safety for the consumer. As Ukraine is the biggest Soya producers in Europe and a potential ally in an European Protein strategy we want to increase our cooperation with Ukrainian Producers and Stakeholders in the next years and also open an office in Kiev.

- Tell us about the main principles of the Association "Danube soybeans" and the goals you set for yourself

- The goal of the association is to develop a recognized consumer brand for European Soya, improve the ecology of agriculture by having soya in crop rotation under controlled best practice methods, improve the livelyhood of farmers with a high level commodity, improve rural development, promote Non-GM production of soya, and re-connect Eastern and Western Europe via the development of an Inter-European Protein market.

- What countries in the Danube region, does your association cooperate with?

- The Danube Area as defined by the association and based on geographic and cultural defintions comprises wholly or partly 16 nations from Switzerland to the Black Sea. Danube Soya is active in all these countries. 14 countries have signed the Danube Soya Declaration for the developmentv of Danube Soya and we hope that Ukraine will soon be the 15th signarory.

- Do you feel the fundamental differences in matters of production, processing and export of GMO and non-GMO in these countries compared to Ukraine?

- Non-GM- Soya is a higher priced and valued commodity in the EU. Currently, 7 Million tons of Soya beans from Non-GM origin are used in the EU and the market is developing quickly. Ukraine can become an important supplier and producer.

- Does your association work with Ukrainian farmers? What can you offer them exactly if to grown on-GMO soybeans?

- We will start the first tests with Danube Soya Certification on 15.000 hectars for the harvest 2015 with three partners in Ukraine. This test case will prove that non-GM production in Ukraine is feasible, and a good market exists. To expand production we need processors in Ukraine for Danube Soya Soya meal, as the EU countries mainly import meal and not seeds. We are also planning to start with organic soya. Currently, much of the organic Soya in Europe is imported from China, and consumers want to have European soya instead. This is a chance for Ukrainian producrers. Another niche market is food soya, a market which is currently appx. 500.000 tons in Europe and where high quality Ukrainian Soya could also play an important role.

Our offer in this respect consequently is a support role for Ukrainian farmers to develop their production offering on a quality level which fulfills the requirements of Western European markets and to assist in buildingtrustful buyer – producer relationships and value chain streams. We also support the producer in the possibilities to improve their non-GMO production skills to achieve better yields and use the optimal production inputs and machinery in referring training activities. Such a training program will become part of an initiative we are currently prepare to start by mid of next year after after initial pilot projects this year.

- In your opinion, Ukrainian farmers are provided with sufficient volume of non-GMO soybean seeds, aren’t they?

- Good seeds are the basis of quality products. In 2015 all over Europe there was a lack of Soya seeds due to the large increase in production all over Europe. Good seeds are an investment that pays off: no GM contamination and higher yields. We would like to work with Ukrainian and European Seed companies to increase availability, quality and price competetiveness of certified seeds for Ukrainian Farmers.

- Are any high quality analysis of qualitative indicators of soy for the members of the association? Maybe they get some quality certificates.

- The Danube Soya Standard has three main criteria: Origin from the Danube Soya region, Non-GM Status according to German and Austrian Law and Sustainability of Production. The non-GM status is very important to get a better price for the product. Alsothe customers in Europe want not only to have Non-GM but also sustainable soya. So taking the steps to certify Danube Soya can be an important part of a sales strategy to highly liquid and well paying markets. Otherwise, Danube Soya does not include quality criteria such as protein or other quality criteria, as there are a variety of markets such as feed, food and organic with different requirements. From the harvest of 2015 Danube Soya will also offer Europe Soya certification, a certification with the same criteria as Danube Soya but covering all the territory of geographical Europe, including all of Ukraine of course.

- Matthias, how do you think, what is the potential role of Ukraine in establishing the supply chain of not GMO soya to Europe?

- Ukraine is the biggest Soya producer in Europe. Europe wants to get away from overseas soya production. The Non-GM markets are the highest price markets. It makes sense for Ukrainian Quality producer to integrate in these markets. We estimate that 30-50% of Ukrainian Soya could feed into this market of 7 Million tons, which we estimate to be 10 Million tons in 2020. In order to access these markets several steps have to be taken: Ensuring production of Non-GM soya in seperated supply chains, developing Non-GM soya meal production, solving logistical issues and transport. Danube Soya would like to work together with producers on these issues.

- What Ukrainian companies does your association cooperate? What mutually beneficial principles is your cooperation based on?

- Danube Soya is a non profit organization. Our goal is to support members to find new and well paying markets for their soya and consult them on the process to access these markets from finding the best seeds, agronomic advice, certification, market access and support. We organize regular meetings with buyers of soya, market visit tours and other activities helping Ukrainian producers finding new markets. Equally important is the building of trust between buyers and sellers. Ukrainian producers have to work together to build trust in the buyers market for their products and their Danube Soya can become a very powerful tool. By early 2015 we where able to welcome our first member from Ukraine, Svarog West in the Danube Soya association, further more organisations like TAS Agro, ATK and Grain Alliance are in the process to evaluate or already applied a membership. We also prepare a cooperation agreement with the Agri Business Club and will further address in the future small and mid-size agro organisations from the production, collection, processing, trade, input production as well as life-stock industry and retail to participate in our programs.

- In your opinion, what is the advantage of the production of non-GMO soybeans (perhaps, economic)?

- Firstly, producing GM-Soyabeans is illegal all over the EU and in Ukraine as well. Secondly, the question we should ask ourselves is: with whom do we want to compete? With Brazilian GM-production? Or should we go for stable, high-liquidity markets in Western Europe which are increasingly Non-GM? This is a question for each producer and company and for the country also. In my opinion, Ukraine has a great chance to make much more money by Non-GM production as the prices are much higher, and production cost is only marginally higher. The main problem is ensuring segregation.

- You probably know that most soybeans grown in Ukraine are GMO and while exporting it is basically impossible to separate the GMO soyabeans from non GMO. How do you plan to deal with this fact, to supply exactly non-GMO soybeans in Europe? (Work with certain agricultural producers, traders, ...)

- The chain from field to silo to processor has to be segregated. This is possible by using rapid tests on all steps of production which are very economic. It is an added effort which pays off because of better prices. Of course this means the participation of stakeholders in the whole value chain, because such systems need to be trustful and Western European markets are very sensible in the reliability of the separation.But even in Brazil with 85% GM it is possible, so it is also possible in Ukraine with much lower GM-percentages.

- Not so long ago in Ukraine has been registered a bill, which legalizes production of some GMO soybean varieties in Ukraine. What is your opinion to this?

- I do not want to comment on National Ukrainian Issues, but I want to stress that it is important to see that the more GM you grow, the more expensive is seperation. The question is which direction Ukraine wants to take? To Europe and to Quality production or into low quality low price competition with Brazil?

- Is your association to constructively discuss the cultivation and export of non-GMO soybeans in Ukraine with the Ukrainian Ministry of Agrarian Policy and Food of Ukraine?

- Yes, we have a very friendly and good dialogue with the government and authorities and want to increase this dialogue over time. There are many common interests and a lot of joint cooperation ideas for the future.

- In addition to the issue of GMOs, the question of the possible introduction of an export duty for soybeans annually raises in Ukraine. Do you think in case of the export duty introduction, your association will have any difficulties or not?

- Again, we do not want to get involved in internal issues. We would like to point out that we support the local processing of Soya beans in Ukraine as we want to add as much value as possible locally. We welcome cooperation with local processors and understand current issues in the over-capacity of existing processing plants. It is important to see that some markets such as Organic Soya and certified Gmo-free food and feed soya would have problems finding markets when an export duty is levied, which consequently reduces the possibility for the Ukraine producers to become an active player in such European markets, where the focus in domestic processing is also an existing factor. Maybe these types of high quality high priced soyabeans could be exempted from an export levy!

Interviewed by Anna Platonova

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