Every day Ukrainians buy, cook and consume cereals. However, every year the consumption of flour and cereals is decreasing, while production is increasing. Combines are modernizing equipment and building new workshops, increasing production rates, which is explained by the increase in exports of cereals and flour abroad. What is the current situation on the domestic croup market?
KOLORO marketers have conducted market research and collected current statistics on cereals in Ukraine.
Structurally, domestic products occupy about 80% of the market. For 2017, producers gave away 206,758 tons of cereals and cereal-based finished products. Of these, pure cereals are 148,040 tons and prepared foods (such as muesli) are 58,718 tons.
Cereal production for 2017 compared to 2016 increased by 2.6% on average, driven by higher output of oatmeal, buckwheat and other cereals.
Oatmeal output was up more than 52%. This is directly related to the accelerating rhythm of life of Ukrainians (as a consequence, the lack of time to fully cook porridge), as well as the developing trend for healthy eating and breakfast cereals with dried fruits.
Source: Ukrgosstat
Industrial activity index for cereals in Ukraine
The index of industrial activity shows how the volume of production is changing. It is calculated as the ratio of the current volume of production in monetary terms to the volume of industrial production in the previous year. In monetary terms, cereal production in Ukraine decreased.
Source: Ukrgosstat
Kharkiv, Odessa, Kyiv, Cherkasy and Dnipropetrovsk regions are the leaders in cereal production in Ukraine.
Source: Ukrgosstat
Actual value of sown areas of crops by types of cereals in 2013 – 2017, thousand ha
From the period 2013 to 2017, buckwheat groats ranked first in production in 2017 with 48.66 thousand tons. Virtually all of the volume produced is consumed on the domestic market.
In 2017 , 48.22 thousand tons of corn groats were produced. Unlike buckwheat, corn is primarily an export product.
Rice production is in the third place with a significant lag from the first two – 17.94 thousand tons. After the annexation of Crimea, the area of rice crops has significantly decreased.
Source: Ukrgosstat
Consumer basket of Ukrainians, insights and consumption of cereals
The market is filled with products of own production. Imported goods are less popular than domestic ones – consumers have more confidence in Ukrainian groats.
Source: Ukrgosstat
As we mentioned above, in recent years, oats (oatmeal, oat flakes) and their derivatives have taken up more and more space in the consumer basket of Ukrainians. Oatmeal is a dietary product, so the consumer chooses it willingly, which is due to the speed of preparation and high usefulness. Despite the growing popularity of oats, rice, buckwheat and legumes (peas, beans, lentils, soybeans) still occupy the top 3.
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Source: Ukrgosstat
2.5 kg of rice and 2 kg of buckwheat is eaten by an average Ukrainian per year. More than half of the groats we buy are used to prepare side dishes. It is a relatively cheap product that is part of the basic consumer basket and is bought in advance. Buckwheat holds its own among consumer favorites. Ukrainians eat up to 180,000 tons a year, but its production is gradually falling, giving way to rice, legumes and other cereals. The reason for this is low profitability and devaluation of the national currency. Nevertheless, Ukraine still exports a lot of buckwheat and remains in the top three exporters.
As of the last quarter of 2017, average prices for basic cereals varied by type. The price of wheat groats increased from UAH 7,476 to UAH 11,136 per ton. Buckwheat became cheaper from UAH 22,345 to UAH 15,014 per ton.
It is interesting to see the price trend from 2013 to 2017. Millet groats are one of the cheapest, buckwheat groats are one of the most expensive. These two products are taken into account in average prices on the official website of Gosstat, showing the segmentation of the Ukrainian croup market (prices are in hryvnias per ton).
Source: Ukrgosstat
How did prices for cereal crops in Ukraine change in 2017? The price of rice tends to rise, while buckwheat is subject to fluctuations.
Source: Ukrgosstat
Study results
In the domestic croup market, buckwheat still holds the leading positions in terms of domestic production and consumption, while corn is the leader in terms of exports. The production and purchase of oat groats by Ukrainians increased by more than half due to the spread of the healthy lifestyle trend. Prices for buckwheat remain the highest, for wheat groats – the lowest, as in previous years. However, the dynamics of price growth for buckwheat and rice in Ukraine is unstable, and the cost of rice tends to increase.
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