Today, industrial hemp is grown in more than 30 countries of the world. Asian countries make up about 75% of the overall market for the production of raw materials and manufacturing products. The total cultivated area of Europe occupies 15% of the share of world production. However, EU countries (as processors of products with high added value) are significant players in the market. For Ukrainian exports, the import duty rate to the EU is zero.
The Ukrainian market for the production of industrial hemp is small. Only from 2,000 to 4,000 hectares of land are sown every year, however, back in the days of the Soviet Union, Ukraine cultivated about 120,000 hectares of industrial hemp and had 35 processing plants, of which only 3 remain. So, the capacities of Ukraine were reduced by 30 times.
In general, the development of the industrial hemp industry in Ukraine, as well as globally, depends primarily on legislation that regulates the market and imposes strict restrictions on manufacturers, including licenses and quotas, as well as limiting the circulation of such products. (* In 2024, legislative changes were adopted to simplify the regulatory framework for the circulation of industrial hemp) .
As of today (2020), only 62 business entities hold licenses for conducting economic activities in this field. In 2020, only 38 of them actually sowed or intended to sow this crop.
Due to legislative ambiguity (as of 2020), not all parts of hemp (flowers and leaves) are utilized in economic activities. In practice, agricultural producers who cultivate conventional crops do not receive profits that could possibly reach up to $100,000 per hectare.
At the same time, the global market for industrial hemp is estimated by experts to be over $4 billion USD. It has high development potential and is investment-attractive.
In Ukraine, only seeds and stems of industrial hemp are used, which limits the range of manufactured products and reduces the industry’s potential profitability.
The usage of technical hemp in Ukraine
- Foodstuff: oil, flour, milk, hemp seed spread, hemp snacks, hemp bran, biscuits, chocolate, tinctures, beer, wine;
- Cosmetic products: soap, hand cream, face cream, body scrub, body butter, face and body lotion;
- Textile: blankets, bed linen, tablecloths and napkins;
- Clothes, shoes, headgear, reusable masks, hemp fur;
- Litters and leashes for dogs;
- Building material
Picture 1. Dynamics of sown areas of industrial hemp in Ukraine
Source: State Statistics Service
Table 1. Volumes of declared future planted areas for allocation of quotas
Year | Number of applications | Sown area, ha |
|---|---|---|
2015 | 13 | 4760 |
2016 | 18 | 13049 |
2017 | 34 | 22075 |
2018 | 31 | 15391 |
2019 | 32 | 14573 |
2020 | 40 | 14477 |
Industrial hemp in Ukraine is sown fragmentarily in Vinnytsia, Zhytomyr, Kyiv, Sumy, Kharkiv and Cherkasy regions. Crop areas range from a few acres to 800 hectares. In Poltava region organic industrial hemp is cultivated.
CULTIVATION OF INDUSTRIAL HEMP
A distinctive feature of hemp cultivation is that plant protection agents are rarely used during industrial hemp cultivation. Additionally, hemp cultivation contributes to soil quality improvement. Furthermore, all parts of the plant: flowers, seeds, leaves, stems and roots can be utilized for potential further processing,
The main areas of technical hemp application in Ukraine:
- For seeds;
- For fiber;
- For seeds and dried straw.
Depending on the way of application, the costs and profitability of the culture vary.
Figure 2. Possibilities of using parts of the industrial hemp plant
The profitability of growing hemp for obtaining seed material is 112.5%. When cultivating plants for further processing into fiber, profitability can range from 32% to 62%. If you use varieties that provide the possibility of obtaining two types of production of seed material and dried straw (for fiber), the profitability can reach 184%.
The average yield of varieties grown for seeds is 1.7-2 tons per hectare (variety “Glessiia”). The cost of commodity seed is approximately 40,000 UAH per ton. Hulled seeds are priced at around 600 UAH per kilogram.
At the same time, retail prices in stores for hemp seeds are within 100-200 UAH/kg. 8 business entities are engaged in cultivating plants for the purpose of selling seed material in Ukraine. The cost of such seeds is about 100,000 UAH /t. To obtain fiber, varieties characterized by a high level of fiber content are used – 38,9% (variety Hlukhivska-51), at the same time, the yield of straw is 10,0-11,5 t/ha, and seeds – 0,9-1,0 t/ha. The cost of seed material of such varieties is also from 90,000 to 100,000 UAH per ton. When cultivating varieties that can provide two types of products (Gliana variety), it is characterized by straw productivity at the level of 7.5-8.0 t/ha. and seeds at the level of 1.0-1.2 t/ha.² The cost of seed varies depending on reproduction level and is up to UAH 100,000/t.
Due to imperfect legislation, only hemp seeds and dried straw are used in Ukraine. Ukrainian producers lose profits due to the impossibility of using inflorescences and leaves – plant`s most expensive parts.
Processing including these elements can bring up to $100,000 per hectare.
The use of such elements of the plant as the roots is not carried out in Ukraine, although, for example, in China, cosmetics are made from it.
Material is taken from
“The Green Book” Industrial hemp market”
BRDO “Better regulation delivery office”