Ukrainian market of soybeans — innovations today bring successful tomorrow

For several recent years, the Ukrainian market of soybeans increased the planted areas and the production volumes. However, the current season developments could influence the further market development.

The features of the domestic soybean market establishment and expectations of the future development of the market of soybeans and its by-products were the major topics of our interview with the President of the Ukrainian Association of producers and processors of soybeans, Viktor Tymchenko.

 - Viktor Naumovich, this year the Association celebrates its 15^th anniversary. The main tasks for founding of the Association were the expansion of the planted areas under soybeans, increasing of their production effectiveness, the growth of processing. How do You think have You succeeded these objectives?

Our Association was founded in December 2003. The main task of the Association was to ensure the increase of the planted areas under soybeans and its yield and production. In order to implements the plans we together with the scientists of the National Academy of Agrarian Sciences of Ukraine developed the sectorial programs “Soya of Ukraine 2004, 2005-2010, 2008-2015” that defined the methods of increasing the growth of the seedlings, the planed area and the yield. In fact, we put to the program the scientists that were the best to understand the area, who were aware of the area status and developed the scientific prospects. We started with the first “Day of Field” in Ukraine, which was held on at the consolidation “Arnika” in Globyn area of Poltava oblast in 2004. In terms of the event the varieties of soybeans and the equipment were demonstrated. This was a spur for the development of the educational system of soybeans growing for the agrarians. It was necessary to teach everything – how to work at the fields with new varieties and the equipment.

In this way, the days of fields and the workshops were held in other oblasts of Ukraine.

Of course, we have accomplished the task put before the Association creation. Also, in 2011 we fulfilled the tasks, put for 2015, to increase the area planted from the 190 thsd ha in 2003 to the 1 mln ha and the production from 230 thsd tonnes to 1.7 mln tonnes. In fact, in 2011 the planted areas reached 1.13 mln ha and the production – 1.8 mln tonnes which made Ukraine the leader among the CIS and the EU countries producing soybeans.

- In You opinion, was the onrush of the soybeans market in Ukraine possible, due to the training workshops?

Of course, it was a major factor at the first stage, but it was not enough for the further development of the market. The number of people visiting the events declined from 200-250 to 30-40.

Thus, it was not possible to cover 22 oblasts of Ukraine. Then the management of the Institute of the feed and agriculture of Podolia decided to change the approach and the scope of the training activities. Therefore, there was a nationwide workshop held at the premises of the institute. The institute invited the specialists from each oblasts of Ukraine – the plant selection breeder, the agronomist, the herd manager, the technologist and the specialist of soybeans processing. They held training sessions over the soybean growing and processing processes and each of the participants got the set of the documents with information about the varieties, the growing technologies and the equipment. Thus, we pulled the whole agronomic area in order to succeed the tasks. As the result, in 2012 we held the 91th trans-district workshop regarding the “Soybean Production Management” for the 6233 specialists. During this period we held also 7 trans-regional workshops for the 500 participant. We also held such events during 2013-2014 and got good results.

The well-developed system of the career development system for the agronomic services led to the stable high results of the soybeans harvest, increase of the planted areas and the production.

Planted areas, yields and production growth rates of soybeans in Ukraine

From 2011 to 2017 the yield number (excluding 2012 and 2015 due to the drought) amounts to 2-2.3 t/ha and the planted areas and the production grow. This resulted in Ukraine coming from the number 20 to 8 among the countries producing soybeans in the world. In 2017 the planted areas under soybeans amounted to 1.976 mln ha, the production reached 3.9 mln tonnes and the yield – 1.97 t/ha.

Together with the soybeans production growth the exports increased too. For example, in 2003 the exports of soybeans totaled 42.4 thsd tonnes, whereas in 2017 – 2.87 mln tonnes; the exports of soybean oil in 2003 reached 4 thsd tonnes and in 2017 – 166 thsd tonnes; the exports of soybean meal increased from 0.17 thsd tonnes to 308.7 thsd tonnes.

It is necessary to think about the way to produce the items with added value. We need to show the possible economic effect for the producers. For now we have almost changed the priorities of the Association. As for today, we are aimed at finding the best solutions for distribution of soybean by-products and the innovation decisions for its further processing.

The Association plans to further popularize soybeans and its by-products for the feed formulas for cows. In particular, the company “Arnika Feed” together with the specialists of the Ukrainian Association of producers and processors of soybeans demonstrate the innovative product “TEPmix” made on the basis of the secure protein and the starch (transient energy protein) that should increase the average daily milk yield per 1 cow by 1.5-4 l.

- Organic products became a new trend of the agrimarket, including organic soybeans. Can You share Your estimations of the market and the vision of its short term development?

The production of the organic products is quite interesting sphere, but it is also very complicated and labor-intensive. Frankly speaking, the prospects of the organic soybeans production development are blur taking into account the condition of the land bank. Approximately 80% of soybeans grown in Ukraine include GMO that is why the process of the organic production is complicated. We need to spend 3 years to clear the land to grow the organic products. On the other hand, the growth of the organic soybean production is the chance to replace the GM soybeans. Moreover, the organic products are more expensive and have a high demand on the global market.

The procedure of the organic soybeans growth is longstanding. First, it is necessary to prepare the land, then the arable lands must be certified with accordance to “Organic Standard” and at last, it is necessary to choose the adequate seeds of soybeans.

- The Verchovna Rada abandoned the VAT refund for oilseeds. At the same time, the cancellation of the VAT refund for the exports of soybeans and rapeseed does not include the enterprises that independently grow these oilseeds on their own lands. How would You comment the issue?

We of course touched upon the subject as it could lead to the reduction of the planted areas under soybeans. There would not be any consequences in the current season as agrarians have already bought the material resources. However, the next season might face them. Thus, we focused our work on keeping the possibility to export with VAT refund for the enterprises that produce and export soybeans independently that was thus enshrined in the Law of Ukraine 7404-D from 4^th of April of 2018. These enterprises as a rule are the large ones. Herewith, there is question what small farmers that grow the oilseeds but not export them should do. Thus, the idea of the creation of the cooperatives consortium of soybeans exports is being discussed.

- The issue of seeds and its quality is a matter of concern for many farmers. How would You estimate the seeds market of Ukraine?

In 2005 the 64 varieties of soybeans (89%) were registered and 8 of them were of foreign selection (11%). In 2017 we could see the 125 varieties of the Ukrainian selection on the market (60%) and 85 varieties of the foreign selection (40%). The experience has proven that the varieties of the domestic plant breeders are not worse than of the foreign selections and all of the soybeans producer’s requests are met through the Ukrainian plant breeders and foreign companies.

- Can You please share the plans of You company for the following 5 years?

Our plans can be viewed at the table below.

As you can see, the planed areas together with the yield and production numbers are expected to significantly increase.

Interviewed by Anna Platonova, APK-Inform Agency