Rice production in Ukraine is mainly concentrated on South of Khersonskaya and Odesskaya regions and at northern-east part of Crimea. Rice system areas, built in 1961-1971, are situated in the areas of Krasnoznamensky and Severokrymsky irrigating mains and are approx. 62 thousand ha big. Rice production decrease in 90s, stimulated by prolonged financial and economic crisis in the country and issues of ecological safety of rice cultivation in recreation areas, resulted in the fact that paddy area share stopped from being used according to its intended application. That is why over last 10-15 years areas of rice crop rotation decreased to 43-45 thousand ha, and rice has been cultivated at area of around 21-22 thousand ha. Annual increase of cultivation areas is at low pace – around 0.5%. At the same time starting from 2004 we can trace a tendency for total yield growth of paddy due to increase in crop capacity. Rice production dynamics in Ukraine is shown at the fig.1.
Fig.1. Rice production in Ukraine
As you can see from the diagram above, starting from 2004 total yield of paddy has increased by 19.1 thousand tones or by 23.4% after quite a prolonged downfall at the end of 90s.
Import
The fact that Ukraine entered WTO and that in 2007 rice import duties were reviewed and changed resulted in duty decrease from 10% to 5% of the product customs value. Despite the fact that decrease of customs duty did not call forth in high-rocketed volumes of rice imported into the country, import share of total volume consumption is constant with every year.
Fig. 2 Domestic rice production in Ukraine-import ratio
Rice import makes about 2/3 of the crop market capacity in Ukraine. And the tendency is quite a threat for a domestic manufacturer. The problem solution, probably, lies in enforcement of governmental regulation called to safeguard domestic producer. Another way to support domestic manufacturer is to improve imported rice quality standards.
Fig. 3 Rice import to Ukraine, by source countries, January-August 2007
After the import tendencies had been studied, the fact, that during three last years geography of rice delivered to Ukraine has changed, calls forth some concerns. If at the beginning of 2000s the main paddy importers were Asian countries (China, Vietnam), starting from 2005 Egypt takes the role. During 2005-2006 rice delivered volume from Egypt was over half of the crop imported to the country (52% and 58%, respectively), but starting this year the share of Egyptian paddy in the total import volume has decreased to 46%. According to Goskomstat (Statistics State Committee), Egyptian rice is cheaper then the Asian one. A lot of cheap (≈130$) smashed rice is imported from Egypt and makes average price for Egyptian rice to be 176$ (January-August 2007)
Rice prices
Paddy processing into grains is conducted at rice plants. A part of raw rice is processed by paddy households at their own rice plants and cereal products complexes.
Rice grain price for domestically manufactured crop is formed at the stages of raw rice production, its processing, retail and wholesale trade. Raw rice prices vary in quite a broad spectre (800-1200 UAH/tone) and reflect its quality. Thus there no paddy standards have yet been approved in Ukraine, there is no crop sort based gradation of rice prices. The price also depends on financial situation of agricultural producer, thus if an enterprise has to pay back a bank loan, production would have to be sold by prices set by a costumer.
Seasonal fluctuations of release prices for rice grain at processing enterprises are shown at fig.5
Fig. 5 Prices at processing enterprises in 2006
Seasonal rice grain price fluctuations can be considered not so relevant, and rather represent overall price increase in the country, then paddy price change. Grain prices at the households that have their own processing capacities are lower then the prices at processing enterprises, due to no feedstock transportation costs.
Conclusions
Rice market in Ukraine is generally stable. Rice cultivation areas in Ukraine have come to a size of 21-22 thousand ha. Production capacities during recent years have been growing due to crop capacity increase. Growth rates of the domestic grain production are no sufficient enough to change the share of the product consumption. Import takes 2/3 share of rice demand in Ukraine. Despite the feedstock prices are quite dispersed, grain prices are quite stable.
RICE MARKET IN UKRAINE OVERVIEW
S.G. Vozhegov, Agr. PhD, V.A. Eropkin, E.I. Chekamova
Rice Institute UAAS (Ukraine)
SUMMARY
The article is an overview of rice market in Ukraine. The data includes domestic production capacities over recent years, as well as rice import tendencies, prices at the market of paddy and its procession products.
