Sales of agricultural lands in Ukraine up 50% in February - expert analysis

MOSCOW. April 3 (Interfax) - About 9,600 purchase-and-sale transactions for a total of 22,000 hectares of agricultural lands were concluded in Ukraine in February 2024, which is 50% more than in January 2024, Ukrainian media reported citing an analytical survey of the Ukrainian land market carried out by the Kiev School of Economics Center for Food and Land Use Research along with the U.S. Agency for International Development Program for Agrarian and Rural Development.

This previous peak in sales of farmlands since the start of the crisis was observed in December 2023, when 8,200 deals involving 19,800 hectares of farmland were concluded. The market leaders since the beginning of 2024 have been the Poltava (3,700 hectares), Dnepropetrovsk (2,700 hectares), and Kirovograd (2,000 hectares) regions.

Since the land market was opened for legal entities, 266 companies have exercised the right to purchase agricultural land, including 223 companies that purchased at least one plot of land in February 2024. In general, legal entities have been increasingly more active on the market. According to updated data, the amount of land purchased by legal entities grew from 507 plots totaling 1,500 hectares in January to 1,200 plots totaling 3,500 hectares in February. Hence, the share of legal entities on the Ukrainian farmland market increased from 10.3% in January to 15.8% in February 2024, the survey said.

An overwhelming part of the land purchased by legal entities in January and February 2024 were areas previously under the moratorium, with 40% of the total area sold since the start of the year located in the Poltava region. The frontline Sumy (10%) and Kharkov (7%) regions were also among the top-three regions in terms of land purchased by legal entities.

The prices at which the land purchase-and-sale agreements were concluded have remained stable, the weighted average price per hectare in February 2024 being UAH 41,600, compared to UAH 41,700 in January. The weighted average price of land for commercial farming was UAH 42,500 per hectare in February against UAH 42,400 per hectare in January.

In half of the transactions involving individuals, the sale price of farmland did not exceed the standard monetary value by more than 0.9%, while in half of all transactions concluded by legal entities, the transaction price exceeded it by more than 50%.

"This difference may show either that legal entities are willing to pay a higher price for agricultural land, or that legal entities are more motivated to indicate the real transaction price in official documents rather than indicate the minimum acceptable price and pay the difference in cash," Kiev School of Economics Center for Food and Land Use Research expert Roman Neiter said.