Ukraine agriculture in trouble

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Reports from various media have explained the horrible conditions for agricultural operations in Ukraine being in as much turmoil as any business activities in the country. Even the rural areas not under rebel separatists’ control are having problems.

Crops haven’t been planted because of disruption of supply for inputs. And the forecast for cereal crops production from this breadbasket of the Black Sea has put wheat prices on a roller coaster around the world.

Wheat surged by 15 percent in the first quarter of the year as tensions between Russia and Ukraine were building and planting season was beginning, according to Bloomberg news service. Since that time wheat prices came down as U.S. wheat production looked relatively good, and now prices are expected to climb with all the violence, including the downing of the Malaysian airliner, and the worry that wheat supplies won’t reach market out of storage or the fields that were planted this year.

International companies doing business in Ukraine are having major problems. The agricultural example is Cargill, which has been doing business in the country for about 21 years. Cargill’s sunflower crushing plant in separists controlled area has been shut down since July 4, and the Wall Street Journal reported rebels recently seized the plant.

Until the conflict, Cargill had been aggressively investing in agricultural operations in both Russia and Ukraine.


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