Agricultural machinery in Ukraine

The demand for agricultural machinery in Ukraine exceeds the current market supply with U.S. imports of agricultural machinery and equipment almost tripling in recent years.

The demand for agricultural machinery in Ukraine exceeds the current market supply. According to some local experts, the market potential for agricultural machinery and spare parts is estimated at $12 billion. There is a market for both new and used agricultural machinery and equipment, which includes tractors, combine harvesters as well as tillage, seeding and grain handling equipment.

In 2011, U.S. imports of agricultural machinery and equipment almost tripled the previous year. In 2010, the largest number of tractors were imported from Belarus and the U.S., followed by Germany. During the same reporting period, the majority of imports of combine harvesters were from Germany with the United States far behind.

*figures are estimated based on market trends and experience
Total Market Size = (Total Local Production + Total Imports) – (Total Exports)
Data sources: Global Trade Atlas; State Statistics Service of Ukraine; Ukragroleasing; Interfax Ukraine

All major agricultural machinery suppliers are present in Ukraine. Germany and the U.S. are leading the market followed by the French, Dutch, Italian, Turkish, and Polish manufacturers. The biggest brands represented are John Deere, Claas, Case, New Holland, Kuhn, Franz Kleine, Challenger, Kinze, Great Plains, and Massey Fergusson.

Agricultural machinery demand exists across all sectors of the agriculture, however specific opportunities are available in grain handling and storage equipment as Ukraine is a large producer of grain. The market declined since the 2008 economic crisis but has been slowly recovering.

Used agricultural machinery and equipment constitutes an important part of all agricultural machinery and equipment imports. It should be noted though, that the Ukrainian market is dominated by used agricultural machinery and equipment that have many hours on them and were manufactured ten or more years ago. Such machinery is obviously cheaper in the local market where financing is limited and very expensive. In order to stimulate sales of new equipment, manufacturers offer attractive incentives to local farmers to buy new machinery and equipment, which often costs less than used equipment with low hours.

The depreciation level of the agricultural machinery amounts to 70-80%, which has slightly improved from 80-90% last year. Still, about one third of equipment is estimated as critically obsolete and virtually non-functioning. This shortage contributes to an annual harvest loss.

The GOU plans to develop local manufacture of agricultural machinery. To do so, it is inviting the world’s largest producers of agricultural machinery to assemble in Ukraine. According to the Ministry of Agriculture, agricultural machinery would be assembled using a combination of local and imported parts. The Ministry’s plan is that the local content would start at 10% and increase to 80% as the initiative matures. Nevertheless, there should be space for both imported and locally manufactured machinery, because the market potential is big.

Best Prospects
• Grain-harvesting combines and tractors
• Local assembly of Ag machinery
• Tillage equipment (cultivators, plows, disc harrows)
• Infrastructure (grain storage bins, conveyors, bucket elevators etc; various warehouse facilities)
• Feed & fodder production equipment
• Fruits and vegetables production equipment
• Pork processing equipment
• Equipment for production of sunflower oil, corn, rapeseed, barley and wheat

Source: U.S. A. Department of Commerce U.S. Commercial Service, Doing Business in Ukraine: 2012 Country Commercial Guide for U.S. Companies


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