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Market Information Ukraine


Ukraine is located in the heart of Eastern Europe and occupies a land area of 603,700 sq km, which makes it the second largest country in Europe after Russia. It neighbours Poland, Slovakia, Hungary, Moldova and Romania to the west, Russia to the east, Belarus to the north, the Black Sea and the Azov Sea to the south. Ukraine’s total land boundary is 4,558 km, coastline is 2,782 km. Administrative divisions: 24 oblasts, 1 autonomous Autonomous Republic of Crimea (Krym), 2 municipalities (Kiev and Sevastopol  regions).

The territory of Ukraine is mostly a level, treeless plain, calls "steppe". There are the Crimean Mountains in the Crimean peninsula and the Carpathians in the west, but they are not very high. Mixed forests of pine and fir-trees, beeches, limes, oaks and elms cover the mountains, but the thickest woods can still be found in the northern part of the republic, in Volyn. Kiev and Cherkassy lie in the midst of Ukrainian southernmost pine forest. The main Ukrainian river is the Dnepr. It is one of the longest European rivers and one of the republic's main source of hydroelectric power.

The climate of the country is moderate. Winter is rather mild, with no severe frosts but with regular snowfalls everywhere except the south. The rivers and lakes freeze in winter. The average winter temperature varies -20 Centigrade in the north to -3-5 in the south. Summer is quite hot and dry, with occasional showers and thunderstorms. The fertile black soil is well watered in spring and autumn and gets plenty of sunshine in summer.
Due to favourable climatic conditions, Ukraine is traditionally an agricultural area. It grows wheat, maize, buckwheat and other corn, red and green vegetables, all kinds of fruit, melons and berries. Ukraine is one of the world's main centers of sugar production. It produces sugar both for her own needs and for export. The country is rich in natural resources, such as iron ore, coal, color metal, oil, gas, mineral salts, clay and potential water power. It has developed a varied industry, concentrated mostly in and around big cities, such as Kiev, Zaporozhye, Dnepropetrovsk, Dnyeprodzerzhinsk, Odessa, Kharkov, Lviv, Nickolayev and other. Odessa, Sebastopol, Nickolayev, Kherson and Kerch are main Ukrainian ports.


History
Ukraine was the center of the first Slavic state, Kievan Rus, which during the 10th and 11th centuries was the largest and most powerful state in Europe. Weakened by internecine quarrels and Mongol invasions, Kievan Rus was incorporated into the Grand Duchy of Lithuania and eventually    into the Polish-Lithuanian Commonwealth. The cultural and religious legacy of Kievan Rus laid the foundation for Ukrainian nationalism through subsequent centuries. A new Ukrainian state, the Cossack Hetmanate, was established during the mid-17th century after an uprising against the Poles. Despite continuous Muscovite pressure, the Hetmanate managed to remain autonomous for well over 100 years. During the latter part of the 18th century, most Ukrainian ethnographic territory was absorbed by the Russian Empire. Following the collapse of czarist Russia in 1917, Ukraine was able to bring about a short-lived period of independence (1917-20), but was reconquered and forced to endure a brutal Soviet rule that engineered two artificial famines (1921-22 and 1932-33) in which over 8 million died. In World War II, German and Soviet armies were responsible for some 7 to 8 million more deaths. Although final independence for Ukraine was achieved in 1991 with the dissolution of the USSR, democracy remained elusive as the legacy of state control and endemic corruption stalled efforts at economic reform, privatization, and civil liberties. A peaceful mass protest "Orange Revolution" in the closing months of 2004 forced the authorities to overturn a rigged presidential election and to allow a new internationally monitored vote that swept into power a reformist slate under Viktor Yuschenko. The new government presents its citizens with hope that the country may at last attain true freedom and prosperity.


Economy
With rich farmlands, a well-developed industrial base, highly trained labour force, and a good education system; Ukraine has the potential to become a major European economy. The economic situation records very high growth rates : 9.0% in 2006, 11.5% in 2007 and a forecast of 10.8% in 2008. The country’s long-term economic prospects depend on acceleration of its market reforms. The economy remains burdened by excessive government regulation, corruption, and lack of law enforcement; which are the main hurdles for attracting foreign investments. Combined with recent constitutional changes that weakened the authority of president Viktor Yushchenko; it will be difficult for him to continue with his agenda of structural economic reforms. Annual average inflation rate, remaining at 6,7% in 2007, shows a decreasing tendancy. Real GDP growth reached about 7% in 2006-07, fueled by high global prices for steel - Ukraine's top export - and by strong domestic consumption, spurred by rising pensions and wages. Although the economy is likely to expand in 2008, long-term growth could be threatened by the government's plans to reinstate tax, trade, and customs privileges and to maintain restrictive grain export quotas.
Ukraine’s economy will grow quickly. This means that the majority of Ukrainians believe that now is generally a good time to make major household decisions. Furthermore joblessness will continue to decline and Ukraine’s rate of unemployment will approach its natural level. In 2008, unemployment will be 6.4%.


Key figures


Population
Total population 46,299,862 (2007)
Population growth -0,675 percent (2007)
Language Ukrainian (official Language), Russian
Religion Orthodox (patriarch in Kiev), orthodox (patriarch in Moscow),
Roman Catholic, Protestant, Jewish, Muslim


Economic Indicators
GDP 151,958 billion US dollar (2008)
GDP per capita 3,297 US dollar (2008)
GDP Real growth rate 3,8 percent (2006), 4.5 percent (2007), 4.6 percent (2008)
Rise in consumer prices 10,8% percent (2008)
Currency hryvnia


Foreign Trade
Total import 54.3 billion US dollar (2007)
Total export 46.68 billion US dollar (2007)
Main Trading partners
Import: Russia, Germany, Turkmenistan, China, Poland
Export: Russia, Turkey, Italy, Germany, Poland


Agriculture
                              “30% of the world’s black soil plain is in Ukraine”


The agriculture sector has a major role in Ukraine’s economy and contributes nearly 10% to the GDP. The main crops are: cereals, sunflower seeds and sugar are grown on very large scale. Ukraine is the 5th largest exporter of cereals in the world. Ukraine, with no less than 30 million hectares of agricultural land in use, is potentially one of the largest agricultural producers in the world. The climate is ideal for farming and the soil is extremely fertile; 30% of the world’s black soil plain is in Ukraine.
The Ukrainian Government is committed to developing the sector. Privatisation and liberalisation is gradually proceeding. During the last years, some 14,000 new farms were established on state - Kolchose land. On the remaining state-owned land, some 37,000 independent agricultural companies are active. Together they produce 70% of all agricultural output. Not to underestimate the importance of the huge “Dacha” market; 11.5 million households farm on such private lots.

Horticulture

       “The Ukrainian horticultural sector is developing rapidly, offering solid opportunities for suppliers of professional horticultural products and technology ”


Ukraine has a vast horticultural sector and is considered as a large and potential market for horticultural products, flowers and plants. With the present development of Kiev, a city of 2.6 million people, the demand for relatively luxury products such as flowers and plants is increasing rapidly again. The supply, however, is still limited and there are good export opportunities.
The south of Ukraine, with its enormous production fields for vegetables like melons, cucumbers and tomatoes offers unique possibilities for Western suppliers of quality inputs and technology. Main outdoor crops are cabbages, onions, red beet and carrots. The complete chain however is in need of further development. Greenhouses all over Ukraine need to be renovated.


Animal Farming


“Livestock breeding is one of the cornerstones of the Ukrainian economy”


Breeding of cattle, pigs, sheep, goats and poultry is widely spread. However, production suffers from inefficiency. Private production is gradually increasing, but a lack of feed and spread of animal diseases causes an insufficient supply. This means an enormous potential for western exporters of products within the complete spectrum of animal farming. The sector is recognised as the most volatile and is now firmly picking up business. In 2007, Ukraine’s pork industry will continue to recover. Substantial foreign and domestic investments in pork production will lead to expanded production capability and industry efficiency. This trend is especially relevant for production in large industrial farms. Production in the household sector will remain substantial but relatively inefficient. The number of animals and productivity in households is expected to decrease slightly. Imports of pork into Ukraine are expected to remain significant (assuming no political changes). The trend is being fueled by three factors: increased purchasing power of the average consumer, slow domestic production growth and decreased poultry imports.


Infrastructure

“A lot of challenges in Infrastructure”


The UEFA European Championships in 2012, which Ukraine is co-hosting with Poland, is making the upgrading of the country's transport infrastructure an urgent priority. The challenges are obvious: ageing rolling stock, shoddy roads, declining traffic to the country's ports and an outdated customs infrastructure. With foreign investors keen to get in on the clean-up act, a legal framework allowing concessions and public-private partnerships is a must. The football championships are not the only issue bringing the poor state of the nation's infrastructure into question – the rising number of vehicles and cargo using the roads, for example, means an overhaul is urgently required. To this end, the government plans to plough $15bn into the network, building 500-km of new motorway over the next seven years, with financing expected from a consortium of local and international companies. This sector has a lot of oppportunities for foreign investment.

 

For further detailed information please have a look at:


http://www.ukrstat.gov.ua/
https://www.cia.gov/cia/publications/factbook/index.html
http://www.oekraine.com/core/geography_e.htm

 

 



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