Ukraine steps up pace, volume of agricultural land sales

MOSCOW. Aug 1 (Interfax) - The number of sale and purchase transactions of agricultural land in Ukraine reached 27,300 with a total area of 60,800 hectares in Q2 this year, which is 6.3% more than in Q1 in terms of the number of transactions and 3.3% more in terms of the area of land in turnover.

These are the findings of a survey conducted by the Kiev School of Economics (KSE), which was carried out at the request of the United States Agency for International Development (USAID) program, Ukrainian media reported.

"The main factor for the growth of indicators in Q2 was a record increase in land market volumes in April 2024, when 10,300 sale and purchase transactions with an aggregate area of 22,500 ha were concluded. After that, the market volumes declined in May (9,000 transactions with an aggregate area of 19,800 ha), and in June (8,000 transactions with an aggregate area of 18,500 ha)," analysts said.

This decline is associated with limited liquidity of farmers, as the sowing campaign has already ended in May-June, while the harvest campaign has yet to begin, which constrained their financial resources, they said. At the same time, landowners may wait to sell amid higher land prices after the land market was opened for legal entities. Analysts also assume that there is seasonality on the agricultural land sale market.

Overall, the volumes of the land market have been recovering since the crisis broke out, but have not reached the pre-crisis levels, KSE experts said. Average monthly sales of agricultural land totaled 19,900 ha in H1 this year, which is 38% lower than the pre-crisis figures. At the same time, the area of agricultural land deals has dropped over 20% since February 2022.

"If we extrapolate the indicators seen in the first half of 2024 for the whole year and do not take into account the areas where the land market is complicated due to the crisis, then this year 0.8% of the total amount of agricultural land will be in circulation, which almost matches the indicators of countries with developed land markets. [...] Given the trends of monthly growth in sales volumes before February 2022, it can be stated that if not for the crisis, the average monthly volumes of land in circulation would have been much higher than 32,200 ha. Consequently, the land market has a capacity for growth in the short term," the KSE survey says.