A country with agricultural or industrial export records: what should be the future of the Ukrainian economy

Export for Ukraine is not just an economic income item, but a real driver of survival in the conditions of war and global economic challenges. From grains that feed the world to high-tech IT products, Ukrainian goods are looking for their place on international markets. However, exports should not only be a source of foreign exchange earnings, but also a basis for economic transformation. Today, Ukraine remains mostly a supplier of raw materials, but this is a path that leads nowhere. We export grain, while importing machinery, paying billions for equipment, transport and energy carriers. If the country continues to remain the breadbasket of the world without developing industry, it risks losing its future.

Ukraine is a strategic player in the world economy

Ukraine has long ceased to be just the geographical center of Europe — it is becoming a global center of economic weight, without which the world can no longer function fully. Republican Senator Lindsey Graham called Ukraine “the richest country in Europe” in his speech on the Fox News channel. His words sound not only as a political compliment, but also as a sober assessment of the strategic importance of Ukraine for the global economy, energy and security.

The country, which is traditionally known for its fertile soils, today plays the role of a granary for many countries of the world. Half of the food supplied to Africa comes from Ukraine. These are not just facts, but a reality that affects the lives of millions of people. 20 years ago, Ukraine “fed” only 40 million people in the world, and now its contribution is equivalent to feeding about 400 million people, not counting our population. Minister of Agricultural Policy Roman Leshchenko assures, that Ukraine is confidently strengthening its status as one of the biggest guarantors of global food security. He predicts that this number will reach 1 billion by 2030.

However, Ukraine is not only a breadbasket. The country’s bowels hide riches that are critical to modern industry. Uranium, titanium, lithium, graphite, as well as rare earth elements are resources that form the basis of the energy transition in developed countries. According to experts, the value of rare earth elements located on the territory of Ukraine is from two to seven trillion dollars. This puts Ukraine in the center of interests of European states and the USA, which consider it as a strategic partner in ensuring access to these resources.

Global players are becoming more and more aware that the stability of Ukraine is the guarantor of the stability of the whole world. As a granary that feeds millions of people on different continents, and as a source of critical resources, Ukraine has become a central link in the global economic and political system.

Achievement of modern Ukrainian export

As of November 2024, Ukrainian exports of goods exceeded the figures for the entire year 2023, reaching $36.3 billion. This indicates the rapid growth of the country’s foreign economic activity, despite the difficult conditions of the war and economic challenges. Yuliya Svyridenko, First Deputy Prime Minister and Minister of Economy statedthat such results are evidence of stabilization of the economy and adaptation of Ukrainian producers to new conditions. Moreover, in October, Ukrainian exports reached a record high indicator in monetary equivalent for the entire year 2024. During the month, Ukraine exported goods worth more than $3.8 billion, which is 18.7% more than in September. According to preliminary data, since the beginning of the year, the total volume of exports of goods amounted to almost $34.6 billion.

A significant increase in exports in October became possible thanks to an increase in the supply of agricultural products. In particular, the value of export of agricultural products increased by 32.3%, and the physical volume – by 33.8%. This made it possible to reach the physical export volume of 10.9 million tons, which is 26.2% more compared to September. Thanks to the efforts of our defenders, who ensure the functioning of the sea corridor, despite the threat from the enemy, in October, exports by sea transport increased by 28.2% in monetary terms and by 37.1% in terms of weight.

High export performance was made possible by several key factors. First of all, it is an increase in the export of new crop products, which made it possible to maintain Ukraine’s position as one of the world’s largest exporters of agricultural products. Secondly, the stable operation of the “Ukrainian Maritime Corridor” made it possible to ensure uninterrupted supplies of goods, despite military actions and the threat of blockade of Black Sea ports. Thirdly, the restoration of domestic production in certain industries made it possible to increase the supply on the world market.

In 2024, Ukrainian goods continue to be in high demand on world markets. The export leaders for the period from January 1 to November 17 were:

• Oils (sunflower, safflower or cotton) — $4.4 billion (5.3 million tons);
• Corn — $4.2 billion (25.5 million tons);
• Wheat and a mixture of wheat and rye — $3.4 billion (19 million tons);
• Iron ores and concentrates — $2.5 billion (29.7 million tons);
• Rapeseed or colza seeds — $1.7 billion (3.5 million tons);
• Insulated wires, cables — $1.1 billion (60.5 thousand tons);
• Soybeans — $1.1 billion (2.8 million tons).

Agricultural products remain the main driver of Ukrainian exports, while metallurgy and engineering products show a gradual recovery.

Despite positive developments, Ukrainian exporters face a number of problems. Logistical difficulties caused by the war limit access to some markets and make it difficult to deliver goods. Also, competition on world markets remains high, which requires Ukrainian manufacturers to ensure the highest quality of products. In addition, the instability of the legislative environment and difficulties in obtaining credit can inhibit the development of exports.

New export rules

From December 1, 2024, new export rules will enter into force in Ukraine, which are already causing lively discussions among businesses and experts. State Customs Service announced, that now for the customs clearance of certain goods it is necessary to observe the minimum export prices established by the Ministry of Agrarian Policy. This step is designed to strengthen control over export operations and ensure fair competition in international markets.

At first glance, these changes may seem like another bureaucratic complication, but they open up new opportunities for Ukrainian business. Among the goods covered by the new rules are honey, nuts, cereals, oils, rapeseed and sunflower seeds, as well as waste from the production of vegetable oils. This list covers key export items that have been the basis of foreign currency inflows to the country for many years.

The idea of ​​introducing minimum prices is to prevent dumping and undervaluation of goods exported abroad. According to representatives of the customs service, such rules will help increase trade transparency and protect Ukrainian producers from unfair price conditions. If the price in the declaration turns out to be lower than the established one, the customs office reserves the right to refuse to allow the goods to pass. At the same time, updated prices will be regularly published on the official website of the Ministry of Agrarian Policy, which will allow businesses to quickly navigate the new realities.

Why is this important? Ukraine has long occupied an important place among the leading exporters of agricultural products. But global markets are becoming increasingly competitive, and trust in the quality and transparency of trade transactions plays a crucial role. The introduction of clear pricing standards can become a strong argument in favor of Ukrainian goods, which are able to compete not only on price, but also on quality.

On the other hand, these innovations require rapid adaptation by business. Businesses will have to carefully analyze markets, cooperate with government authorities, and invest in the development of infrastructure and logistics. However, these challenges can become an impetus for long-term growth and strengthening of Ukraine’s position on the world stage.

Changes in export rules are also a signal to international partners: Ukraine seeks to modernize its trade processes and meet global standards. If all parties – from the state to business – can cooperate effectively, the new rules will be not only a test, but also a chance to create a sustainable economic model where everyone wins: producers, consumers and the state.

Negative trade balance

Despite the successes in exports, which Ukraine proudly reports, the overall picture of the country’s trade balance remains alarming. For January-September 2024, the import of goods significantly exceeded the export: $51.2 billion against $30.7 billion. This means that the trade deficit has reached more than $20 billion, and these are not just numbers – they are a direct indicator of structural problems in the economy that require immediate solutions.

The main share of imports falls on machines, equipment, vehicles, products of the chemical industry, and fuel and energy products. This suggests that Ukraine largely depends on foreign markets in the field of technology, energy and high-tech production. The lack of own production of modern equipment and technologies means not only economic vulnerability, but also the loss of the opportunity to create added value in the country.

Another painful point is fuel and energy imports. Ukraine, having significant reserves of natural resources, still imports energy carriers, depending on price fluctuations and geopolitical risks. This is not just an economic challenge, but a matter of national security.

Trade with Europe remains key for Ukraine, and Poland is traditionally the largest partner among European countries. This cooperation has its advantages, but at the same time it shows that a significant part of imports comes from the immediate neighborhood, while Ukrainian goods try to break into other world markets, often facing competition from the same European producers.

A negative trade balance is not only a statistical problem. It puts pressure on the national currency, increases the country’s debt obligations and forces the government to seek resources to finance the gap. For a country that is at war and trying to rebuild its economy at the same time, such a deficit is a serious problem.

From an industrial giant to an agrarian economy

Ukraine, which was once the industrial heart of the Soviet Union and one of the largest exporters of heavy industry products, today increasingly sounds like the “granary of Europe” or the “nursery of Africa” ​​in the world. Behind these epithets hides the painful transformation of the country, which in three decades of independence lost a significant part of its industrial potential and was actually limited to the role of a supplier of raw materials.

In Soviet times, Ukraine was a center of heavy industry: aircraft engines, tanks, missiles, ships, tractors, electronics and much more were produced here. Metallurgy, chemical industry, mechanical engineering were not just key branches of the economy, but symbols of Ukrainian power. Domestic factories worked at full capacity, and Ukrainian products found their customers in all corners of the world. However, after the collapse of the USSR, these industries gradually lost their competitiveness. Corruption, inefficient management, economic crises, and later war dealt a crushing blow to the industry.

Today, Ukraine exports mostly agricultural products, raw materials and semi-finished products. Only grain, corn, sunflower oil and rapeseed bring the country more than 40% of foreign exchange earnings. Undoubtedly, the agricultural sector has shown its efficiency and ability to compete on world markets. But this is only part of the story. Ukraine has the potential to be not only a breadbasket, but also a technological leader that creates added value and shapes global trends.

Agrarian economy is the path of least resistance. It is easier to grow grain and ship it abroad than to invest in upgrading old businesses or launching new technology startups. The problem is that the raw material economy always depends on external factors — climate, prices on world markets, logistics routes. And most importantly, it creates a minimum of added value for the country that exports it.

The transition from an industrial giant to an agricultural raw material supplier is not just an economic fact, but a significant strategic loss for the country. When Ukraine exports grain instead of cars or planes, it loses intellectual capital, skilled workers and scientific potential. The shift from high-tech production to agricultural specialization means that the country is gradually ceding key positions in the global market to others.

For the government of Ukraine, the main question should be: how to change this situation? Ukraine has a huge potential for increasing the export of not only raw materials, but also high-tech products. Development of domestic production, energy independence and modernization of infrastructure should become priorities of state policy. Only by creating competitive products that are in demand on world markets, Ukraine will be able to reverse the negative trend.

In today’s world, where technology and innovation dictate the rules of the game, Ukraine can no longer afford to remain a supplier of raw materials for other economies. After the war, the country must take a decisive step forward — not only to maintain its position as a global leader in the field of agricultural exports, but also to regain the status of an industrial and technological giant. Ukrainian steel should once again become the foundation of the world’s infrastructure, our machines and equipment should compete on an equal footing with European and Asian ones, and IT products and scientific developments should shape the future of technology. Reviving industry and investing in innovation is not just an economic necessity, it should become a matter of national pride and geopolitical influence. Only a country that creates added value and shapes new global trends can dictate its conditions on the world stage. Ukraine should become just such a state – strong, high-tech and truly independent from anyone.

Oksana Ishchenko