Ukraine farm sector indirect losses may reach $83 bln

Indirect losses in Ukraine’s key agricultural sector caused by the Russian invasion could reach $83 billion by the end of 2025, mainly due to falling harvests, informed the Kyiv School of Economics (KSE) on Thursday.

Ukraine is a global major grower and exporter of grain, vegetable oils and oilseeds.

KSE said in a report the expected sum included losses of crop production, animal husbandry, losses of producers due to export disruptions, as well as losses due to rising production costs and losses due to the need to return land to production.

“The largest share of losses was caused by a decrease in crop production. The total indirect losses due to the reduction in crop production amount to $46.5 billion,” it said.

KSE said crop production decreased both due to a decrease in sown areas and due to a change in production technology, which leads to a drop in the yield of major crops.

Ukraine’s combined grain and oilseed harvest was 107 million metric tons in 2021 but is likely to fall to around 77 million tons in 2024.

KSE also said that the second largest category was losses due to export disruption and they are estimated at $24.1 billion.

“The naval blockade imposed by the Russian Federation at the beginning of the invasion, and subsequently the limited functioning of the so-called grain corridor, led to an increase in logistics costs,” KSE said.

Amid the war with Russia, the agricultural sector remains one of the main sources of export earnings for the Ukrainian economy, supplying grain, vegetable oil and oilseeds to foreign markets.

Media, quoting farm ministry data, have said farm exports totalled around $23 billion in 2023.

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Tags: agricultural sector, Ukraine, vegetable oils, grain, oilseeds, Production, crop, yield, losses