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Agrokultura defends rapeseed in Ukraine portfolio

Agrokultura defended rapeseed, which has a patchy record in Ukraine, among its crop portfolio as the former Soviet Union farm operator revealed a jump to nearly 500,000 tonnes in its overall harvest this year.

The group said that, with 2,300 hectares to go out of a total of approaching 130,000 hectares, it had harvested 470,000 tonnes of grains, oilseeds and sugar beet, up 20% year on year.

The rise came despite some disappointment in in Ukraine where the group's grain yields, while above the national average, had risen by less than Agrokultura had hoped.

"We had targeted higher yields for Ukrainian grains, and we are making the relevant changes to input programmes and operating techniques to improve performance," said Stephen Pickup, who was promoted last month to the group's managing director from finance director.

The Agrokultura winter wheat yield rose just 2% to 3.8 tonnes per hectare, and the winter barley result by 12% to 3.7 tonnes per hectare, compared with a 27% rebound in the national result for grains overall, according to Ukraine farm ministry data.

'Well suited'

However, Agrokultura said that its winter rapeseed yield had soared 33% to 2.9 tonnes per hectare in Ukraine.

"Rapeseed has again shown it is well suited to western Ukraine with excellent yields which improved materially over 2012," Mr Pickup said.

The oilseed has a somewhat mixed performance in the country, with hail damage, pests and, in particular, cold winters reducing its popularity in many areas, and putting a stop to a run-up in area, on a harvested basis, from 54,000 hectares in 2003 to 1.38m hectares five years later, on US Department of Agriculture data.

That has fallen back to some 1.0m hectares this year, on USDA estimates.

Landkom lesson

Indeed, Landkom International, which Agrokultura acquired last year, and where Mr Pickup previously worked, had a difficult experience with the oilseed.

A disappointing crop in 2011, when the yield came in at 1.75 tonnes per hectare left Landkom unable to meet sales commitments, and prompted the group to warn on profits and reveal it was "now reviewing strategic options", which led to the takeover by  Agrokultura.

Agrokultura has this year been revamping its land portfolio with a focus on western Ukraine, where it says the climate is less volatile than eastern areas.

Russia results

In Russia's black earth region, where Agrokultura has harvested 69,100 hectares so far, with the 2,300 hectares outstanding, the group achieved "significant yield improvements", Mr Pickup said.

This year's crops "have benefited from the good weather conditions in Russia for most of the season although rain in the harvest time has delayed completion".

Yields were, in fact, a higher in Russia for corn and sunflowers than in Ukraine but, at 3.6 tonnes per hectare, a little lower for winter wheat.

Agrokultura shares, which are listed in Stockholm, rose 0.4% to SKE2.46 in morning deals.

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