Ukraine Agricultural Machinery and Equipment
A significant uptick in international demand for Ukrainian agricultural products is driving the need for increased efficiency and production capabilities, which has boosted demand for modern agricultural machinery and equipment. Recently passed land reform is expected to boost financing options for Ukrainian producers.
Although Ukraine is a major global producer of crops, its agricultural sector is under-equipped, and much of its existing agricultural machinery is outdated. According to the Institute of Agrarian Economics of Ukraine, the availability of fixed assets per one hectare of farmland was 20 percent. The primary factor restricting agricultural development is access to credit and working capital. Domestic loans are expensive, and Ukraine’s challenging business climate prevents local companies from attracting cheaper international funds. Therefore, the competition among suppliers of agricultural machinery in Ukraine is not only about quality, but also about a supplier’s financial terms.
Although major global agricultural machinery and equipment suppliers have a strong presence in Ukraine, there are significant opportunities for U.S. small and medium suppliers.
Grain Storage and Handling
According to the Ukrainian Grain Association, the umbrella for local and international agricultural producers and exporters, Ukraine urgently needs 300-400 new grain elevators and infrastructure. Ukraine loses about two to three percent of the harvest due to lack of storage. Additionally, 25 percent is lost due to improper storage conditions. In 2019, Ukraine’s storage capacity was estimated at 78 million tons. However, certified grain storage capacity is only 42 million tons. Given the projections of growth in production and exports, certified grain storage facilities with export permits and third-party elevator services are in demand.
Tractors
There is solid demand for 120+ horsepower tractors. Over the last ten years, the United States has been the largest exporter of new and used 120+ horsepower tractors to Ukraine. In 2019, the U.S. share of exports of such tractors accounted for 44 percent in terms of U.S. dollar value and 26 percent in terms of quantity. However, there is strong competition from European competitors.
Harvesters
Harvesters are renewed more seldom than other machinery. During 2015-2019, about 11,960
grain harvesters estimated at $1 billion were imported to Ukraine. The share of new and used
grain harvesters imported to Ukraine is almost equal. About 52% of new combine harvesters and 48% of used harvesters were imported to Ukraine. The U.S. is the third-largest exporter of grain harvesters to Ukraine, after Belgium and Germany.
Tillage Equipment
The Ukrainian Government operates a program of 25 percent compensation for the cost of domestically produced agricultural machinery and equipment. This encouraged local manufacturers to invest in manufacturing. While Ukrainian manufacturers are still not able to compete with imported self-propelled machinery, they compete in the tillage equipment segment. However, there remains a strong demand for more cost-effective and sophisticated foreign tillage technologies.
Seeding Equipment
The significant factors defining a purchasing decision are precision, depth, and speed of sowing. In 2019, Ukraine imported 5,166 seeders and planters, 2,098 of which were precision seeders. In 2019, the U.S. share of Ukraine’s import of precision seeders and planters was 14 percent. Major competitors are Swedish and German firms.
Sprayers and Fertilizer Distributors
Ukraine is Europe’s largest market for high-tech and expensive self-propelled sprayers. In 2019, the average unit cost of self-propelled sprayers imported to Ukraine was $166,285. In 2019 Ukraine imported 709 self-propelled sprayers, almost 60 percent more than in 2015. In 2019, the U.S. was the largest exporter of self-propelled sprayers accounting for 199 units, followed by Brazil with 117 units, Germany with 97 units, and France with 72 units.
Irrigation Infrastructure
The total area requiring permanent irrigation is 19 million hectares of arable land. Modernization of irrigation and drainage infrastructure is anticipated after the lifting of the moratorium on agricultural land sales. For more details, please see the Market Intelligence Report: Ukraine Adopts Land Reform Opening Opportunities for Irrigation & Drainage Modernization.
To learn more about export opportunities in Ukraine, please contact the U.S. Commercial Service Ukraine at: office.kyiv@trade.gov.