How will fuel prices affect the cost of groceries after the planting season? — Forecast
24 March 15:44
This year’s planting season in Ukraine will begin slightly later than usual. This is due to weather conditions and deep soil freezing. At the same time, the agricultural sector has sufficient supplies of fuel, seeds, and other necessary resources, and any potential increase in fuel prices will not have a significant impact on food prices.
This was stated by Taras Vysotsky, Deputy Minister of Economy, Environment, and Agriculture of Ukraine.
The Ministry of Economy notes that fuel costs account for approximately 10–15% of the cost structure of agricultural products. Therefore, even if fuel prices rise, the final price of products for consumers may increase by only 1–2%. According to Vysotsky, farmers prepared in advance for spring fieldwork and built up the necessary reserves.
“Most farms have enough resources to carry out sowing for at least several weeks, and sometimes even several months in advance. Fuel was purchased in advance, so no shortages are expected at the start of operations,” the official noted.
Planting season begins amid challenging weather conditions
The active phase of spring fieldwork is beginning in Ukraine, during which farmers are sowing spring crops. At the same time, this year’s planting season may be more difficult due to the effects of winter, which negatively impacted some crops.
Leonid Kozachenko, president of the Ukrainian Agrarian Confederation, stated this in an exclusive comment to "Komersant Ukrainian".
According to him, farmers will have to adjust their crop rotation due to frozen fields.
“Very active spring fieldwork is now beginning, as spring crops are being sown. But the situation may still change, because we will have to increase the area under cultivation. The winter was difficult—many fields suffered from freezing because there was not enough snow cover,” Kozachenko explained.
According to the expert, the cost of agricultural production is significantly affected by rising prices for key resources—primarily fuel and mineral fertilizers.
“The cost of fieldwork is changing due to rising prices not only for fuel but also for mineral fertilizers. Today, there is a shortage of them on the market. Fertilizer production directly depends on the price of gas, and gas prices on global markets have nearly doubled,” he noted.
The expert explained that Ukraine produces more than half of its own mineral fertilizers, but these are primarily nitrogen fertilizers. The country imports a significant portion of its compound fertilizers, which also affects farmers’ costs.
Grain crops yield almost no profit
According to Kozachenko, a separate problem has been the drastic change in the economics of grain crop cultivation.
“For the first time in the last 20 years, grain crops have effectively reached zero profitability. While oilseeds still generated a profit, wheat, rye, and corn yielded almost no profit on average across the country,” he emphasized.
As a result, many agricultural enterprises have suffered financial losses, placing an additional burden on the industry. Another serious challenge for the agricultural sector remains the labor shortage.
“There is another complex issue—who will perform this work. Today, there is a massive labor shortage in the agricultural sector. Even women entering professions where they were previously almost never employed cannot fully meet this need,” the expert explained.
Rising production costs could affect the price of food products, particularly bread.
“Today, a loaf of wheat bread costs about 45–50 hryvnias. If the current situation persists, the price could rise by at least 10 hryvnias,” Kozachenko predicts.
According to him, rye bread is traditionally cheaper, so its price could rise to about 55 hryvnias.
Ukraine will be able to provide for itself
Despite the difficult situation, the expert is convinced that the domestic food market will be supplied.
“Even with all the challenges, Ukraine will have enough grain and other products to meet the needs of its own population,” he emphasized.
At the same time, potential difficulties could affect Ukrainian food exports. This, in turn, could impact countries that rely heavily on grain imports from Ukraine, particularly nations in Africa and the Middle East.
“Many regions of the world—especially countries in Africa and the Middle East—are heavily dependent on food imports from Ukraine. Therefore, any problems in our agricultural sector could be felt far beyond the country’s borders,” Kozachenko concluded.
Condition of winter crops and start of fieldwork
Due to weather conditions, planting will begin later than in previous years. Traditionally, the southern regions—Mykolaiv, Odesa, and Dnipropetrovsk Oblasts—are the first to begin field work.
Overall, most winter crops survived the winter without significant losses—approximately 3–5%. At the same time, the situation is more complicated in some regions.
Specifically, in the Kirovohrad region, losses may reach 30–40%, in the Vinnytsia region—about 20–30%, and in the Dnipropetrovsk, Poltava, and Cherkasy regions—up to 20%.
However, according to the deputy minister, these figures do not pose a threat to the country’s food security.
What support does the government provide
To support farmers, the government continues to implement a number of programs.
Among the main tools:
- preferential lending under the “Affordable Loans 5–7–9%” program, which will remain in effect until March 31, 2027 (for frontline territories—until the end of 2027);
- grant programs for establishing new orchards, building greenhouses, and constructing vegetable storage facilities;
- infrastructure development, particularly irrigation systems, as well as special support for farms in frontline regions.
