Raw Materials vs. Finished Goods: Value Added and Government Policy

The main focus of the paper is the analysis of the efficiency of exporting finished goods of agricultural sector of Ukraine, precisely wheat as opposed to raw materials. Ukraine is among the top three world leaders in grain exports. However it has much lower ranking in terms of trade in flour products. How much more profitable would it be to export value-added products, i.e. processed products? There is an opinion dominating in the expert environment that it is not agricultural raw materials that should be exported but finished agricultural products. Given that Ukraine stands as a reliable trading partner of global food security, it is an important issue to investigate. Paper aims to check whether the sale of agricultural raw materials is actually more effective and in which specific commodity items. The research focuses on grain products, specifically as an example of a raw material wheat is chosen, as an example of a finished good – flour. These were chosen specifically as they are one of the most significant goods from the social perspective. That is why industry analysis and trends, as well as the process of value added of the technological chain “wheat-flour” from growing raw materials to selling and exporting finished products is relevant.