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Ukraine Land Helps Georgia

This harvest year has been one of the best for Ukraine land - excellent growing conditions along with Ukraine's fertile soil have led to high wheat yields. Not quite the record levels seen last year, but more than high enough to keep Ukraine up with the biggest grain producers and exporters. And also more than enough to prove that investment in soft commodities via Ukraine agricultural land has huge potential.

Ukraine's excellent yields are a sharp contrast to those in its near-neighbour, Georgia. Drought conditions in Georgia have led to wheat production falling this year by almost a third. Even the rich and fertile regions situated in the area known as the ‘barn of Georgia' have been unable to produce satisfactory yields throughout this year's harvesting season.

Despite optimistic predictions from the Georgian government who originally forecast yields of 1.6 tonnes per hectare, Georgia's most fertile fields have only managed a meagre 500kg per hectare. One Georgian farmer described the situation of drought hampering wheat growth as so desperate that "it was just a symbolic move to get the combine in the field".

Like many countries, Georgia is a big wheat consumer and requires around 800,000 tonnes a year to satisfy domestic demand. Wheat is the country's fifth largest commodity import and Georgia spent US$50 million last year on the grain. With this year's production coming in at just 80,000 tonnes, Georgia needs to import a staggering 90% of its requirements.

This is where Ukraine land steps in. Ukraine boasts agricultural land that is considerably more fertile and naturally better-irrigated than Georgia. This year, Ukraine has also enjoyed highly-favourable weather conditions and as a result, the harvest from Ukraine agricultural land is bountiful. The most recent US Department of Agriculture report has earmarked Ukraine as one of the few countries where grain production will increase significantly this year.

Around half the grain from Ukraine agricultural land is exported and this year, Ukraine made its first grain donation when it sent 1,000 tonnes to Ethiopia. Ukraine is also expected to be a major exporter of wheat to Georgia.

But Georgia is not just looking for grain imports from Ukraine; Georgian farmers are keen to learn agricultural techniques from their Ukrainian counterparts. Ukraine is currently fast developing its farming methods. High-tech grain storage and modern machinery are becoming part and parcel of Ukraine farming with further technology being introduced almost daily. As a result, grain yields from Ukraine land are increasing annually. In its bid to learn from the Ukrainian experience, Georgia recently signed an agreement with Ukraine to set up a pilot project to increase wheat production.

However, until the project is up and running and producing tangible results, Georgia - along with numerous other countries - will remain highly dependent on grain from Ukraine land. And with its highly-fertile soil and constantly improving farming methods, agricultural land in Ukraine promises to keep harvesting.

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