During two recent years, Ukraine continues actively widening not only the geography, but also the commodity structure of its agricultural exports. The country has excellent opportunities to cover many interesting market segments. According to the FAO forecasts, Ukraine can become one of the largest suppliers of agricultural products on the global market, and play a key role in provision of the global food security. Hereinafter, the Deputy Minister of Agrarian Policy and Food of Ukraine for European Integration, Olga Trofimtseva told APK-Inform journalists about the prospects of development of agricultural exports in the country.
- Olga Vasilyevna, You are actively participating in work of various trade missions. How would You rate the position of Ukraine as the global supplier of food?
Last year we started introducing trade missions in partnership with the Ministry of Economic Development and Trade of Ukraine as an effective tool for active promotion of Ukrainian exports, including agricultural commodities exports. In the short and medium term, Ukraine will become one of the countries, which form a bread basket of the world. We will actively supply raw commodities on the global market - wheat, barley, corn, etc. At the same time, last year Ukraine produced 66 mln tonnes of grains, while the exports totaled slightly less than 40 mln tonnes, which failed to completely realize the potential of supplies. I am sure that in the coming years it is real to achieve the harvest at nearly 80 mln tonnes and increase the exports, at the expense of significant technology shifts. But raw commodities is one component only of our export potential.
The exports of crop by-products, i.e. products with added value, is the second component, which the Ministry of Agrarian Policy and Food of Ukraine focuses in its strategy. So, development of the market sector will allow creating new working positions and contribute to further development of rural areas. As the Ministry forms and realizes the agricultural policy, we should take into account the situation during development of the export potential of agricultural commodities.
- Generally, how do You estimate the prospects for development of the exports of value-added products?
I am an optimist. To date, the share of value-added products in the general exports of agricultural commodities totals nearly 25%. But it is a relative indicator, since the list of such products also includes sunflower oil, which forms the major volumes of exports. At the same time, the real situation is not that great. According to statistics figures and Ukrainian processors, there is a tendency of growth of the exports of other processed products, such as tomatoes, frozen berries, fruit and vegetables, flour, etc. However, despite good export prospects, there are several limitations. It is necessary to work on further diversification of both sales markets and commodity structure of the exports. But it is mainly the competence of agricultural producer. We are a government body, and we are ready to support them in such searches for new markets, including organization of trade missions. In my opinion, we have poorly opened the traditional markets for processed products such as Asia, the Middle East, Africa, and the EU. By the way, the EU market is already the largest consumer of Ukrainian processed foods, and I think that the market will develop in the sphere in future.
- The issues on quality and safety of Ukrainian agricultural products, especially grains, are becoming more relevant. How would You estimate the current control system on quality and safety of Ukrainian products? Which problems should be solved first and foremost?
In Ukraine the newly established State Service on Food Safety and Consumers Protection deals with management and control of food products safety and quality, the new structure combined six major institutions. Such factor creates some difficulties, and becomes the first aspect of the problem. The second aspect concerns that when it comes about phytosanitary, we went too far with some deregulation, and here I agree with the head of the Food Safety and Consumers Protection, Volodymyr Lapa. Generally, I support deregulation processes, but the government should be able to control some aspects, to avoid some problems with the exports.
To date, we have a good dialogue with specialized associations, and we work to harmonize our legislation and the whole system of quality and safety control of agricultural products to the European standards and requirements. I am sure that we will be able to achieve some certain results in the nearest future.
Also, there should be the responsibility of producers and traders, in addition to the government control. We can not forget about the quality and safety of sold products, because it jeopardizes the reputation of both the supplier and the country in general. So, I have a big request to market participants working in exports, please pay attention to the problem, and provide the required treatment to the products.
- The EU increased the quotas for duty-free supplies of Ukrainian agricultural products. Which products and how the quotas were extended?
Despite the fact that in last year the EU decided to increase the quotas, it is not exactly this way. To date, the European Commission has worked out the required draft law, which the European Parliament and EU member states will approve in the nearest future only, so the process is very long. As for the products which will get increased quotas, there are honey, tomatoes, wheat, corn, flour, etc. According to the Ministry forecasts, the growth of quotas will allow to exporters to receive additional 200 mln USD per annum.
Generally, the Ministry of Economic Development regularly provides negotiations for other commodity items and trade preferences with the EU party. We provide various proposals to them, which we usually get from the industrial associations. And we do not stop after receiving of the quotas. When we get the complete trade statistics for 2016, we will make an analysis and see what commodity groups are most important for Ukrainian producers or processors, including small- and medium-scale ones, so that they can get something from such trade with the EU. And we will initiate a new round of negotiations, possibly in time for our Agrarian and political dialogue between Ukraine and the EU in June 2017.
- Another trend - organic production. At the same time, organic crops are in demand on foreign markets. How do You estimate the export prospects of organic products of Ukrainian origin?
To date, there are no official statistics on organic products. Agricultural producers took away from all figures from the certification and supervisory bodies. It is not a disadvantage, because we can rely on them, because the real advantage of the organic foods market is that it is completely transparent. To date, the general planted areas under organic crops in Ukraine total nearly 400 thsd ha, or less than 1% of the general planted areas. According to independent experts, the exports of organic products total 100 mln EUR. We believe that in the following 3 years Ukraine will be able to significantly increase the rate. We can make such forecasts on the base of the current growth of certified areas and production of organic products. In addition, there is a significant demand on the global market. Generally, the market of organic consumption developed in quite interesting way: North America (the USA and Canada) covers nearly 48% of the imports of organic products, and the EU - 45%. So, we have to focus on the reporting markets, where demand is high. The profitability of organic production in Ukraine is rather high, but we need to create legislative framework, to form the transparent rules for market participants and ensure the stable development of organic production in Ukraine. However, market participants should be aware that reputation is a success on the organic market.
Interviewed by Alina Styozhka, APK-Inform Agency
