The agricultural land market in Ukraine has increased by 30%

The volume of the Ukrainian agricultural land market is currently 30.4% higher than the average monthly area of land in circulation in 2023. This is indicated by experts in the latest analytical review prepared by the KSE Agrocenter in partnership with the USAID AGRO Program. Overall, in July of this year, the market increased by 10.2% in the number of sales agreements concluded and by 4.3% in the area of land in circulation compared to the previous month.  

At the same time, the prices for buying and selling agricultural land in July resumed growth after a slight decline in May and June, reaching the highest levels since the market's inception. The weighted average price of land sales in July was UAH 46,000 per hectare, which is 4.5% higher than in June and 1.5% more than in May of this year. Since the market opened to legal entities (on January 1 of this year), prices have risen by 24% for all land and by 19% for so-called "commodity" lands. 

It should be noted that since the opening of the land market to legal entities, 953 companies have exercised their right to purchase land, of which 363 companies acquired at least one agricultural plot in July. This is the highest figure since legal entities have had access to this market. They are gradually increasing their presence in the agricultural land market in Ukraine. Since the beginning of 2024, legal entities have purchased 8,849 land plots with a total area of 26.2 thousand hectares, of which 4.7 thousand hectares were acquired in July, which is 5% more than in June. The share of legal entities in the land market in July was 24.1%, slightly higher than in June (23.8%), and significantly higher compared to the average for the first seven months of this year (18.8%).

In this regard, considering that in Ukraine there are 23.5 thousand agricultural producers engaged in the production of grains and legumes, and 18.5 thousand agricultural producers involved in sunflower production, the share of legal entities in the land market has significant potential for growth. 

It is worth noting that Ukraine has established its first state operator of agricultural land. Currently, the State Property Fund of Ukraine has completed the corporatization process of the state enterprise "Agrarian Investment Fund," creating the State Land Bank LLC based on it. This company, which is 100% state-owned, is the first state operator of agricultural land in Ukraine. This is a necessary final step in implementing the "Land Bank" project before the official launch of the first online auctions for the rental of state lands. 

Regarding the issues in the agricultural land market, approximately 23% of agricultural lands in Ukraine are still not included in the cadastre. However, the Ukrainian government expects that the inventory of all agricultural lands in the country will result in additional annual revenues to local budgets of nearly 28 billion UAH. It is known that to expedite the process of land inventory, the central government and regions have already signed a relevant memorandum.