Better financial results due to higher prices - that's the essence of the story of the biggest companies in the agriculture sector last year. Nearly 80% of the 100 largest companies in the sector improved their financial results compared to 2021, with ten companies seeing revenue leapfrog by more than 100%.
The war in a key producer like Ukraine, which Russia invaded last year, has pushed up commodity quotas over fears of potential shortages. In fact, high inflation has left a serious mark on industry. Agricultural output prices have risen by almost a third since 2021 - more than in all of the preceding ten years combined. The sharp rise in the prices of the main inputs used in production - fertilizers, chemicals and energy - contributed to the increase.
As expected, this has significantly increased the turnover and profits of players in the sector, with grain producers again performing best. Moreover, the excellent results come against the backdrop of a weaker grain harvest last year.
However, the business has made some cardinal errors - expectations of continued abundance have led many companies to stockpile significant quantities in warehouses in the hope of big profits as the war raged on Bulgaria's doorstep. However, their prediction did not come true - the market has calmed, which led to visibly lower prices that will, in turn, inevitably affect this year's company results in the agricultural domain.
Despite the difficulties the sector has undergone in recent years, its potential remains great - something that is particularly true for livestock and fruit and vegetable producers.
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Better financial results due to higher prices - that's the essence of the story of the biggest companies in the agriculture sector last year. Nearly 80% of the 100 largest companies in the sector improved their financial results compared to 2021, with ten companies seeing revenue leapfrog by more than 100%.
The war in a key producer like Ukraine, which Russia invaded last year, has pushed up commodity quotas over fears of potential shortages. In fact, high inflation has left a serious mark on industry. Agricultural output prices have risen by almost a third since 2021 - more than in all of the preceding ten years combined. The sharp rise in the prices of the main inputs used in production - fertilizers, chemicals and energy - contributed to the increase.