Drought and rising prices: what will happen to the agricultural sector in 2025 and how will it affect Ukrainians’ wallets
31 December 2024 12:03
Deputy Chairman of the All-Ukrainian Agrarian Council Denys Marchuk in an exclusive commentary to
“However, the third year has shown that Ukrainian producers can work even in extremely difficult conditions. This year, we harvested about 74 million tons of grains and oilseeds. Although this is not a record figure, it demonstrates our readiness to overcome obstacles,” said Denys Marchuk.
The expert focused on the impact of climate change, which has significantly complicated the work of farmers. In particular, this year’s drought caused significant losses.
“We have lost about 10 million tons of corn due to unfavorable weather conditions during flowering,” said Denys Marchuk.
At the same time, the deputy head of the All-Ukrainian Agrarian Council expressed his gratitude to the Armed Forces of Ukraine for the fact that we have the opportunity to export through the Black Sea ports. Even with the constant attacks on Odesa, the enemy was not able to completely block our routes.
Exports and market stabilization
Marchuk emphasized the importance of exports for the stability of the industry. According to him, the price situation has improved slightly compared to previous seasons. This allows commodity producers to gradually close the debts that have accumulated since the beginning of the full-scale invasion.
“During the two years of war, farmers have actually been working at a loss, but now the market is starting to give them the opportunity to get premium prices,” added Denys Marchuk.
Moreover, the demand for Ukrainian grain on the global market remains high. The weather situation has affected the harvests in many countries.
“This has increased the demand for such crops as corn, wheat, and oilseeds. We have already signed contracts for wheat supplies from Ukraine in 2025. The upward trend in prices continues,” said Denys Marchuk.
Potato prices have doubled: what will happen in 2025?
The 2024 season was a challenge for farmers due to a significant drought, which significantly reduced yields. As a result, the volume of potato imports from the EU, Turkey and other countries reached a record level. Compared to 2023, the producer price has more than doubled.
Mykola Gordiychuk, Director of AGRICO Ukraine LLC, in an exclusive commentary for
“The current price for producers is at 18-24 UAH per kilogram, and no significant changes are expected in the near future,” said Gordiychuk.
“At the same time, there is a tendency: if a certain crop becomes very expensive, farmers increase the area under its cultivation. Probably, in 2025, we will see an increase in the area under potatoes, adds Gordiychuk. However, the problem of a shortage of quality seeds may again negatively affect yields and product quality.
Despite all the challenges, Gordiychuk predicts that the wholesale price of potatoes in 2025 will remain in the range of 18-24 UAH per kilogram, barring any force majeure. This is a rather high level for the Ukrainian market, but it is in line with European trends and helps to stabilize the domestic market.
Key challenges for the agricultural sector
Denys Marchuk, Deputy Chairman of the Ukrainian Agrarian Council, identified several key factors that will affect the industry in 2025:
- Climate change. Weather conditions remain a critical factor for yields. The spring crops sowing campaign scheduled for the spring will give a clearer understanding of the prospects for the next season.
- Booking problems. Since the beginning of the full-scale invasion, farmers have become one of the most mobilized groups of the population. They have relevant experience with machinery, which makes them valuable to both the army and the agricultural sector.
“However, after the cancellation of the Cabinet of Ministers’ resolution on reservations on October 20, many farmers found themselves in a difficult situation. It is important to automatically extend the reservation until this problem with the registers is resolved,” said Denys Marchuk.
- Energy crisis.
“The increase in electricity prices for businesses in the summer has had a serious impact on production costs. If the upward trend continues, it will affect the price tags in stores,” explains Denys Marchuk.
- Excise taxes on fuel. The new excise taxes are already affecting the cost of logistics, which is one of the key elements of food pricing.
Betting on marginal crops
“In 2025, farmers will focus on high-margin crops such as rapeseed, soybeans, and sunflower. They traditionally hold a high price, which allows them to compensate for costs even in difficult conditions. This season, these crops have proved to be economically viable,” said Mr. Marchuk.
The Deputy Chairman of the Ukrainian Agrarian Council emphasized the importance of maintaining partnership with the European Union. According to him, it is crucial for us to continue the duty-free trade program. Despite certain restrictions on certain types of products, it opens up opportunities for integration into the European market.
Mr. Marchuk summarizes that Ukrainian farmers have learned to work in the face of war. Although there are still many challenges, we have proven that even in the most difficult times we can ensure food security for both Ukraine and the world.
