Eva Antonenko
23 December 2022 16: 15
Headings: News Economy

The most difficult situation in metallurgy, the production of meat and grain has decreased: production in Ukraine has fallen on average by 70%

The situation is aggravated by attacks on the energy infrastructure and constant blackouts.

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The most difficult situation in metallurgy, the production of meat and grain has decreased: production in Ukraine has fallen on average by 70%

The war led to catastrophic consequences for Ukrainian production.

Previously Prime Minister Denis Shmygal stated that this year the economy could fall by up to 50% if shelling of Ukraine's energy infrastructure continues. But the deputy head of the President's Office Rostislav Shurma less optimistic.

He pointed out how significant the damage to the energy system is and how much restrictions are now present in the work of enterprises in the industrial sector. Therefore, in his opinion, the figures will be significantly lower than expected in the previous quarter, but how much is now impossible to predict.

“It is important that specific enterprises have very large restrictions. And the question is that we should find a solution as quickly as possible on how to restore and balance the energy system in order to give at least some opportunity for these enterprises to work.”, he noted, adding that the fall in real production in the fourth quarter reaches an average of 70%: in some cases - 80-90%, in some - 50%, depending on the situation in each particular region and the connection scheme of a particular enterprise, as well as on its criticality for the economy.

Thus, enterprises responsible for coal mining cannot be shut down for a long time, as well as oil-producing and oil-refining enterprises. They try to limit them less.

And here, for example, on the site "Prykarpattyeoblenergo" сообщили, that in the region until January 31, inclusive, schedules for limiting electricity consumption are introduced for 21 energy-intensive enterprises. The new regime of restrictions provides 36% reduction in consumption from 8 am to 23 pm and 00% the rest of the time. And this will have a direct negative impact on production volumes, and on profits, and on the employment of people at the enterprise, some of which may be reduced. And this is just one region in which, unlike the same Kyiv region, the situation with energy supply is conditionally stable.

And the largest Kyiv concrete producer "Kovalskaya" сообщилthat in case of a complication of the situation with light in winter considering a complete stop of production. But so far, it has been possible to transfer orders for concrete from enterprises where the power is turned off to those where there is electricity at that moment.

Catastrophic situation in metallurgy

The previously very profitable steel industry is now going through the most difficult times. Yes, by results of November 2022:

  • production of rolled products in the country decreased by 85,8% year on year;
  • iron smelting - by 81,8%;
  • steel production - by 80,4%.

The current situation is explained by logistical problems, the situation on world markets, the destruction of two largest metallurgical enterprises - Azovstal и MMK them. Ilyichwho were in Mariupol. In addition, because of the war, Europe became the only sales market, and delivering products by rail is about 2 times more expensive, which directly affects the demand and competition of what is produced.

Therefore, industry enterprises operate with low capacity utilization or even suspend some of them. For example, "ArcelorMital" transferred a significant part of the employees to 2/3 of the load, Zaporizhstal operates only 2 blast furnaces out of four.

Losses in the agricultural sector

According to the Deputy Minister of Agrarian Policy and Food of Ukraine Markiyan Dmitrasevich, today 25% of households have stopped growing agricultural products or reduced the number of livestock, and in general losses of the agricultural sector amounted to 34 billion dollars.

Loss of production crop production in physical terms in 2022 compared to the previous is 35-40%, which is associated with a reduction in acreage and lower yields, as the leading analyst of the Ukrainian Club of Agrarian Business told Svetlana Litvin. However, at the same time, the yield still significantly exceeds the needs of the state (the total grain harvest is more than 50 million tons), which will allow the export of products to continue.

But there is no official information about what is happening with the number of livestock and poultry. The Institute of Agricultural Economics has calculated that milk production at the end of the year will decrease by 10-12% and meet the minimum needs of the market.

The war destroyed a number of livestock enterprises, which led to a reduction in egg production и rapidly rising prices.

Director of the "Institute of Agrarian Economics" Yuri Lupenko stated that the most negative impact of the war on pig meat market, because the largest pork producers were in the Donetsk, Dnepropetrovsk and Kharkiv regions - regions where active hostilities were fought or which were under occupation. According to the State Statistics Service, these three regions provided 26% of pig meat production last year.

For 10 months of 2022, the number of cattle decreased by 14%, poultry - by 13,1%, pigs - by 12%.

Recall that according to Shmyhal, in the most severe case of a complete blackout, it will take, according to preliminary estimates, from 7 to 10 days to get out of the situation.

We also wrote about due to blackouts, some Ukrainians may start to cut right before the New Yearand told what Ukrenergo says about raising electricity tariffs.

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