Overview of Ukrainian potatoes market Kleffmann Group Ukraine February 18
Contents 1. KLEFFMANN GROUP INTRODUCTION Kleffmann Group global approach Kleffmann Group Ukraine 2. POTATOES IN UKRAINE Area Utilization Varieties Costs 2
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Contents 1. KLEFFMANN GROUP INTRODUCTION Kleffmann Group global approach Kleffmann Group Ukraine 2. POTATOES IN UKRAINE Area Utilization Varieties Costs 6
International potatoes production in 16-376 Мt (-2 according to 14) Countries comparisons UA - 6 from global production Russia - 8 4,3 USA - 5 EU - 15 4,8 11 6 22 4 5 5,2 3,5 4 44 31 9,5,2 99 China - 26 2,4 1,3 1,2 4,4 3,9 India - 12 1,1 1,1 < 1 mio t 1-3 mio t 3-5 mio t 5-1 mio t > 1 mio t 1,8 2,2 Top counters (China, EU, India, Russia, Ukraine and USA) increased their share up to 72 of global production (from 69 in 14) Source: FAO, 16, latest available data http://www.fao.org/statistics 7
Relative positions by area, production & yield Ukraine produces potatoes as much as USA, but on area in three times larger Size means production 6 New Zealand 5 USA Denmark Germany Australia Netherlands Jordan 4 Ireland France U.Kingdom Yield, t/ha 3 Poland Bangladesh India Peru Ukraine China Russia 1 Canada Nigeria 1. 2. 3. 4. 5. 6. 7. Area, thsd ha Ranked by Production Area in 16, ths ha Yield, t/ha Production, mio t China 5815,1 17, 99,1 India 213,,5 43,8 Russia 3,9 15,3 31,1 Ukraine 1311,6 16,6 21,8 USA 47,8 49,, Germany 242,5 44,4 1,8 Bangladesh 475,7 19,9 9,5 Poland 311,6 28,5 8,9 France 175,2 39, 6,8 Netherlands 155,6 42, 6,5 U.Kingdom 139, 38,7 5,4 Peru 31,7 14,2 4,4 Canada 342,4 12,6 4,3 Denmark 46, 42,5 2, Nigeria 333,1 3,7 1,2 Australia 28, 4,4 1,1 New Zealand 1,8 49,,5 Ireland 9, 39,1,4 Jordan 6,8 4,1,3 1 rank (top 1) 2-3 ranks 4-5 rank 6-1 ranks Ranks below 1 Source: FAO, 16, latest available data 8
Potatoes yield Countries comparisons and trend 5 Top 1 countries by yield, t/ha USA and New Zealand are leading by potatoes yield with 49 t/ha in 16. Germany, France & Netherlands decreased potatoes yield since 14. Ukraine is on the 92th position in the world by yield with no significant changes. USA 49, New Zealand 49, Average yield, t/ha 45 4 35 3 25 Germany 44,4 Denmark 42,5 Netherlands 42, Australia 4,4 Jordan 4,1 Ireland 39,1 France 39, U.Kingdom 38,7 World 19,6 15 Ukraine 16,6 #92 in the world Source: FAO 9
Yield increase vs. 13 In the Eastern Europe region Poland and Czech significantly improved its yield score vs. 13, while Ukraine, Russia and Belarus do not show such changes Poland +35 vs. '13 Czech +29 vs. '13 Germany +12 vs. '13 Netherlands -1 vs. '13 39,8 47,4 43,8 44,4 42,2 45,7 42,7 42, 21,1 27,8 21, 28,5 23,1 29,1 22,3 29,9 Ukraine +4 vs. '13 Russia +6 vs. '13 Belarus +6 vs. '13 USA +6 vs. '13 46,4 47,2 46,9 49, 16, 17,6 16,1 16,6 14,5 15, 15,9 15,3 19,4,4 19,4,5 Source: FAO, latest available data 1
World export of potatoes by categories Fresh and frozen (e.g. French fries) potato dominate the world export of potatoes Potato categories by export volume, bn t Potato categories by export value, bn USD 25 Flakes, granules, pellets,4 Flour, meal, powder,1 Starch,5 Non frozen, prepared 1, Frozen uncooked,2 Flakes, granules, 22,8 bn t 13,9 bn USD 14 pellets,5 Flour, meal, powder,1 Starch,4 12 Non frozen, prepared 2,2 15 6,3 Frozen, prepared 7,7 1 Frozen uncooked,2 8 6,4 1 6 Frozen, prepared 6,6 5 1,9 Fresh, chilled 11,2 4 2 3,8 Fresh, chilled 3,2 Seed 1,7 Seed,8 Source: ITC calculations based on UN COMTRADE and ITC statistics, www.trademap.org, latest available data 11
World export of potatoes by countries Netherlands and Belgium are key players in the potatoes the in the world both in volume and value All kinds of potato and its products 25 15 1 5 Other countries Top 1 by export volume, bn t High exporters concentration: top 1 countries make 8 of the export volume, other 14 countries - China Iran Pakistan Egypt Canada USA France 2,2 Germany 2,6 Belgium 3,4 1 5 Other countries Top 1 by export value, bn USD High exporters concentration: 22,8 bn t 15 top 1 countries make 84 of the export value, 13,9 bn USD other 14 countries - 16 China Egypt U.Kingdom France Germany Poland Canada 1,2 USA 1,7 Belgium 2,1 Netherlands 4,4 Netherlands 3, Source: ITC calculations based on UN COMTRADE and ITC statistics, www.trademap.org, latest available data 12
Structure of the world export, 16 Netherlands and Belgium dominate the potatoes export by supplying to other countries frozen potatoes (e.g. French fries). Netherlands is also a key supplier of the seed potatoes World Netherlands Belgium in volume in the world s export 5 7 34 49 5 in volume of the country s export 4 22 44 23 7 26 in volume of the country s export 6 3 3 62 Frozen, prepared (e.g. French fries) Non frozen, prepared (Chips etc.) Fresh, chilled Seed Other in value in the world s export in value of the country s export in value of the country s export 8 5 5 23 6 16 47 17 1 12 56 13 8 1 72 Source: ITC calculations based on UN COMTRADE and ITC statistics, www.trademap.org, 16, latest available data 13
World import of potatoes by categories Import of the fresh potatoes has significantly decreased in recent years, while frozen prepared potatoes - increased Potato categories by import volume, bn t Potato categories by import value, bn USD 3 25 5,8 Flakes, granules, pellets,4 Flour, meal, powder,1 Starch 1, Non frozen, prepared,9 Frozen uncooked,5 23,3 bn t 16 14 12 Flakes, granules, pellets,5 Flour, meal, powder,1 14,5 bn USD Starch,7 Non frozen, prepared 2,2 1 Frozen uncooked,4 15 Frozen, prepared 6,7 8 6,3 1 19,7 6 Frozen, prepared 6,3 5 Fresh, chilled 12, 4 2 4,1 Fresh, chilled 3,5 Seed 1,6 Seed,9 Source: ITC calculations based on UN COMTRADE and ITC statistics, www.trademap.org, latest available data 14
World import of potatoes by countries Netherlands and Belgium import the most potatoes in volume, while USA is the largest importer in value All kinds of potato and its products Top 1 by import volume, bn t Top 1 by import value, bn USD 3 Low importers concentration: top 1 countries make 54 of the import volume, other 211 countries - 46 16 Low importers concentration: top 1 countries make 51 of the import value, other 211 countries - 49 14,5 bn USD 25 23,3 bn t 12 Other countries Other countries 15 8 1 5 Portugal Italy Spain Germany Iraq U.Kingdom 1, France 1,2 USA 1,6 4 Japan Brazil Italy Spain Germany Belgium,7 Netherlands,8 U.Kingdom,8 Belgium 2,3 France,9 Netherlands 2,3 USA 1,3 Source: ITC calculations based on UN COMTRADE and ITC statistics, www.trademap.org, latest available data 15
Structure of the world import, 16 Raw potatoes is the main category in the structure of import of Netherlands and Belgium. USA is the largest importer of frozen potatoes (e.g. French fries) World Netherlands Belgium USA in volume in the world s import in volume of the country s import in volume of the country s import in volume of the country s import Frozen, prepared (e.g. French fries) 9 7 29 4 4 16 2 3 6 7 2 3 9 Non frozen, prepared (Chips etc.) Fresh, chilled 52 4 75 82 29 3 57 Seed Other in value in the world s import in value of the country s import in value of the country s import in value of the country s import 12 6 24 15 43 4 8 4 34 14 9 1 58 14 9 9 15 2 12 62 Source: ITC calculations based on UN COMTRADE and ITC statistics, www.trademap.org, 16, latest available data 16
Ukraine s export of potatoes by categories Ukraine significantly decreased export of potatoes since 14 both in volume and value mainly due to the drop in fresh potatoes and prepared non frozen potatoes (e.g. chips and instant puree) export Potato categories by export volume, th t Potato categories by export value, mio USD 25 4 35 8,6 11,9 th t 3 19,4 mio USD 15 Starch,8 25 36,1 Starch,5 1 Non frozen, prepared 6,1 15 16,2 5 Frozen uncooked, 1 Non frozen, prepared 16, Fresh, chilled 4,9 5 3,1 Fresh, chilled 1,6 Source: ITC calculations based on UN COMTRADE and ITC statistics, www.trademap.org, latest available data 17
Ukraine s export of potatoes by countries By 15 Belarus bacame the main destination of the Ukrainian export in volume and Russia in value All kinds of potato and its products 25 Other countries Top 5 by export volume, th t 21,5 th t 4 35 Other countries Top 5 by export value, mio USD 15 5,5 Azerbaijan Moldova 2,2 Russia 3,8 3 25 9,8 3, 19,4 mio USD Georgia 1,2 1 11,6 Georgia 3,9 15 Moldova 1,4 Kazakhstan 2,7 5 1 21,4 Belarus 3,1,3 Belarus 7,1 5 Russia 9,5 2,4 13 14 15 13 14 15 Source: ITC calculations based on UN COMTRADE and ITC statistics, www.trademap.org, latest available data 18
Structure of the Ukraine s export, 15 Non frozen prepared potatoes (e.g. chips and instant puree) constitute 26 of volume of the Ukraine s export and 85 of its value. By 15 Russia was the main buyer of Ukraine s potato chips and puree World Russia Belarus Georgia in volume in the Ukraine s export in volume of the export to the country in volume of the export to the country in volume of the export to the country Non frozen, prepared (e.g. chips, puree) 26 2 9 7 1 Starch Fresh, chilled 71 2 98 91 93 Seed Other in value in the Ukraine s export in value of the export to the country in value of the export to the country in value of the export to the country 13 2 4 35 85 99 59 2 63 Source: ITC calculations based on UN COMTRADE and ITC statistics, www.trademap.org, 15, latest available data 19
Ukraine s import of potatoes by categories Ukraine hugely increased import volume of the fresh potatoes since 15 Potato categories by import volume, th t 17 164 th t Flakes, granules, 16 pellets,4 Starch 3,1 15 Non frozen, prepared 14 8,7 13 Frozen, prepared 14, 1 11 1 9 8 7 6 Fresh, chilled 134,9 5 4 3 11, 14,6 1 Seed 2,3 3,6 6 5 4 3 1 32,3 15,4 3,4 Potato categories by import value, mio USD 47,7 mio USD Flakes, granules, pellets,5 Starch 1,6 Non frozen, prepared 19,8 Frozen, prepared 11,3 Fresh, chilled 13, Seed 1,4 Source: ITC calculations based on UN COMTRADE and ITC statistics, www.trademap.org, latest available data
Ukraine s import of potatoes by countries Poland is the main source of potatoes import to Ukraine All kinds of potato and its products Top 5 by import volume, th t Top 5 by import value, mio USD 5 6 45 4 35 Other countries Russia 22,2 th t 55 5 45 4 Other countries 13,8 3, mio USD Austria 3 25 Austria Germany,8 35 3 25 2,7 Russia,5 Germany 1, Netherlands 2,6 15 1 5 19,7 Netherlands 3,1 Poland 15, 15 1 5 29,4 Poland 23,7 13 14 15 13 14 15 Source: ITC calculations based on UN COMTRADE and ITC statistics, www.trademap.org, latest available data 21
Structure of the Ukraine s import, 15 Ukraine takes frozen potatoes from Netherlands and Poland, while non prepared non frozen (chips) potato is from Germany World Poland Netherlands Germany in volume of the import from the country 54 6 35 in volume of the import from the country 57 41 in volume of the import from the country 24 4 72 in volume of the import from the country 59 36 4 Non frozen, prepared (e.g. chips, puree) Starch Frozen, prepared (e.g. French fries) Seed Other in value of the import from the country in value of the import from the country in value of the import from the country in value of the import from the country 33 3 3 21 5 37 61 69 72 3 6 Source: ITC calculations based on UN COMTRADE and ITC statistics, www.trademap.org, 15, latest available data 22
Growers and crops structure in Ukraine Growers structure: households cultivate about 3 from total area, means over 8 mio ha, 15 belongs to potatoes Potatoes area of enterprises and farms is about Kha structure of total cultivated area based on types of farming households agricultural enterprises and farms structure of sowing area households, Kha 1 8 6 1.268 1.29 1.36 472 472 475 1.214 1.214 1.4 1.216 1.3 1.285 17,5 mio households 4 69 69 15 total area = 26,7 Mha 3 31 31 4.18 3.94 4.51 15 16 17 structure of sowing area enterprises & farms, Kha 23 21 18 1 751 722 621 8 6.994 7.356 7.876 potatoes vegetables fodder oil&indust crops cereals 7 6 4 16 total area = 26,8 Mha 17 total area = 27,4 Mha 1.71 1.41 1.557 15 16 17 41 thsd farms Source: SSSU 23
Area and number of agriculture enterprises and farmers potatoes growers, 16 About 15 enterprises and farmers grown potatoes with average crop area 15 ha. <5 ha 5-1 ha 1-15 ha > 15 ha 1 3 4 5 6 7 8 9 1 area per crop size category, ha 164 98 466 19548 # of farms per crop size category 1.148 114 35 218 5 48 6 156 9 215 4 76 72 3 57 46 68 4 6 2 74 43 5 56 157 19 22 11 32 23 35 2 24 6 29 8 57 65 12 43 3 45 1 16 3 17 21 18,3 2 Average potatoes area per farm, ha Total number of enterprises and farmers potatoes growers 13 of farmers control 86 of crop area 1 515 15 16 Total potatoes area about 23 Kha Source: SSSU 24
Estimation of intensive potatoes area About 5 from total potatoes area belongs to industrial farms Evaluation of intensive potatoes area, ha Main region of intensive potatoes, 17 64.4 62.5 63. 9 4 3 6 8 3 8 1 3 9 15 16 17 6 5 7 3 9 4 5 2 5 5 5 Share of industrial potatoes from total potatoes area Intensive cultivation, industrial processing, selling Source: Kleffmann. amis 25
Summary potatoes producers farms in general 1 farms specializing 5 About 1 5 farms in general*, but only 1/3 from them are specializing farms Intensive approach average crop area per farm 65 ha maximum 1 ha Farm saved seeds small package,6 ha per crop rural households 94 17,5 mio households in Ukraine. About 13 mio of rural population (from them 2,9 have main work in agriculture, forestry and fisheries) Source: SSSU 29-SG 16-1 515 agriculture enterprises and farms grown potatoes 26
Directions of utilization, Ukraine 17 (industrial segment) Food consumption main direction of utilization. Farmers from West regions use from 17 till 48 of potatoes area for seeds production 8 15 4 26 14 77 5 46 2 22 74 17 83 52 86 48 43 26 53 23 1 69 47 6 5 12 1 1 Utilization, area Feed 1 Processing* 6 74 88 Seed 22 Food consumption 71 *in comparison with Ukraine processing utilization in Germany bigger by 1 times. Based on study 16 about 1/3 of growing potatoes was used on processing (food) and 1/3 - for industrial purpose (starch). Source: Kleffmann. amis 27
Share of breeders, from area 17 (industrial segment) Dutch and German breeders are leading on UA potatoes seed market with similar shares Dutch German 41 43 47 44 38 42 15 16 17 Share of breeders, 17 area UA local 9 others 5 Dutch 44 Farmers from North part tend to choose German varieties From West and Center part Dutch German 42 Source: Kleffmann. amis 28
Number of varieties registered in Ukraine Despite rotation of the varieties in the Register, the number of varieties with a high starch content kept 1/3 in numbers Potato varieties registered for 17 18 16 varieties 147* varieties 4 4 31 27 65 High starch content (5 varieties) Average starch content (13 varieties) 24 varieties were excluded from the register for 18 24: 12 high, 12 average starch content others 4 UA local 38 Dutch 33 69 High starch content (41 varieties) Average starch content (99 varieties) 11 new varieties for 18 : 6 high, 5 average starch content UA local 48 others 5 Dutch 35 German German 25 12 *Actual Register on date 24.1.18. It seems that Norika s varieties have delay with registration, it is why the share of German breeders decreased in 2 times (in 17 16 varieties were registered, in 18 none yet variety registered). It is why the share of German breeders decreased in 2 times. Source: State register of plant varieties suitable for dissemination in Ukraine in 17 / 18 29
Average Number of varieties per farms Farmers prefer to sown mainly 3-4 varieties in one farm. Number of varieties per farms 15-17 average max 17 3,88 14 Regional information 17 Color means area, thsd. ha for industry segment. Numbers mean average number of varieties per farm in study 16 3,82 15 15 3,59 15 4,46 6,33 4,9 3,44 4,57 2,25 4,7 3,8 3,1 3,33 5, 3, 3,54 1,63 Source: Kleffmann. amis 3
Top-1 varieties (industrial segment) 17 Kept 52 of market based area (or 51 based on tonnage). Top-2 varieties kept their leading position. Top 3-5 varieties remain among leaders, but Pirol and Granada have a successful penetration and breakthrough to the leaders. Sorted from A to Z Maturity Utilization Food consumption Seed Processing Feed Bella rosa Granada Karlena Melody Opal Picasso Pirol Red Lady Riviera Romano Europlant Pflanzenzucht Solana-Agrar Produkte NORIKA Meijer Solana-Agrar Produkte Agrico NORIKA Solana-Agrar Agrico Agrico Produkte Early Medium early Early Medium ripe Medium early Medium late Medium early Medium early Very early Medium ripe 79 2 18 65 3 29 53 1 46 83 17 63 19 18 81 17 6 1 3 36 76 18 79 58 39 Source: Kleffmann. amis 31
Cost/ha of Crop Protection (industrial segment) Ukraine CPP usage in 17 based on TO Industrial segment (thsd. ha): 16=62,5; 17=63, In average farmers paid 294 $/ha (incl. seed dressing) for crop protection in 17. Fungicides is the key type among crop protection. Farmers used fungicides on 95 of sowing area and pay in average 121 $/ha, providing 4 treatments. 97 of area was treated by herbicides selective. Farmers pay 43 $/ha with 2 treatment. Insecticides used on the 9 from sowing area with 2, treatments during the season. Farmers invest about $/ha. Potatoes seeds are mainly treated by seed dressing products, including inoculation, that is important standard measure with average investment - about 1$/ha. Fungicide 46 Herbicide 17 Seed dresssing 28 Insecticide 8 Others* 1 *Others: Herbicide, non selective; Additive Main type Fungicides Herbicides selective Insecticides 16 17 16 17 16 17 Area treated () 97 95 96 97 8 9 Treatments/hectare 3,8 4,1 1,6 1,8 2, 2, Cost per hectare (USD excl. VAT)* 134 141 5 5 25 25 * Cost/ha = Turnover farmer / Cultivated Area Source: Kleffmann. amis 32
Average cost/ha for crop protection and yield by countries Countries comparisons Top-3 countries based on investments in crop protection are: Brazil, Switzerland and Great Britain. Despite of that they have lower yield than Germany. Average yield, t/ha 5 45 4 35 3 25 15 1 5 BY KZ RO PL HU UA RU SK CZ DE 4 6 8 1 GB Cost/ha for crop protection* $/ha excl. VAT CH * including treatment during vegetation (seed dressing and desiccation were excluded) 15 treatments with 3 products BR Source: Yield FAO, 16 Cost/ha amis study 17 33