Ukraine Agricultural Insights

In the wake of geopolitical tensions and the war initiated by Russia against Ukraine, the agricultural investment landscape finds itself at a crossroads. Nikolai Kisil, a prominent figure in the field as the Leading Researcher of the Department of Investment and Logistics at the NSC «Institute of Agrarian Economics,»
sheds light on the potential repercussions and strategic considerations.

Kisil asserts that the risks borne by investors due to the ongoing conflict could significantly diminish or even vanish altogether.

In such a scenario, he anticipates a swift resurgence in investment activities within the agricultural sector.

The allure lies in the fact that the incremental gains for agricultural producers resulting from surging product prices are poised to outweigh the impact of prevailing negative factors. This, in turn, is expected to expedite the return on investment

This optimistic outlook was conveyed through the press service of the institute, which reported Kisil’s views.

According to preliminary forecasts, the institute suggests that, under a realistic scenario, the agricultural sector could attract a substantial capital investment of UAH 72 billion in 2022.

However, the cloud of additional risks arising from the war prompts a more cautious stance, urging a focus on pessimistic projections for capital investment in agriculture.

Kisil acknowledges the challenging landscape but emphasizes that, despite the uncertainties, the agricultural sector is likely to maintain its investment priority.

Recognizing the heightened risks faced by national agro-investors, Kisil anticipates a strategic shift in investment priorities.

In the territories controlled by Ukraine, he suggests that, in 2022, investors are likely to channel their resources primarily towards the simple reproduction of fixed capital. This involves sustaining existing capacities and investing in the growth of working capital as a pragmatic approach to navigate the turbulent geopolitical environment.

As global uncertainties persist, Nikolai Kisil’s insights provide valuable guidance for investors seeking a balance between capital preservation and strategic investment in the ever-evolving agricultural landscape.