The market for industrial hemp in Ukraine: estimated at $10.5 million in the first year after legalization

In 2024, the industrial hemp market in Ukraine, which received a new impetus after the legalization of the cultivation of this crop in 2023, is estimated at 10.5 million USD. It is expected that in 2025, this figure may double, reaching at least 21 million dollars.

Iryna Gruzinska, head of the "Agriculture" sector of the analytical center BRDO, noted that currently the volume of industrial hemp crops is about 4 thousand hectares. According to her calculations, this can provide a turnover of 10.5 million dollars in 2024.

The forecasts of the Ministry of Agrarian Policy for the year 2025 are optimistic, as it is expected that the cultivated area will double to 8 thousand hectares. However, it is worth considering the difficulties faced by the agricultural sector of Ukraine in the conditions of the ongoing war. These figures are realistic due to the high profitability of industrial hemp, which attracts entrepreneurs.

According to BRDO, the profitability of growing hemp as a raw material for fibers ranges from 30-60%, and the profitability of seeds exceeds 110%. If the producer is able to sell all parts of the plant, this indicator can exceed 180%. Thus, industrial hemp becomes a profitable crop for agricultural producers.

However, despite the positive trends, the Ukrainian industrial hemp market still remains significantly smaller than the world market. Its capacity reached $5.4 billion in 2023 and is projected to grow to $19.7 billion by 2032, with an average growth rate of 15.1%.

Among the important factors that can positively affect the development of the Ukrainian hemp industry in 2025, Iryna Gruzinska notes the continuation of the liberalization of the industry. The reform finally entered into force in August 2024, so farmers will be able to feel the regulatory relaxation as early as next year before the start of the sowing campaign.

In addition, the opening of industrial parks specialized in the cultivation and processing of industrial hemp also contributes to the development of the industry. Two such clusters are already functioning in Ukraine: the "Ma'Rijany" industrial park in Zhytomyr region, the main resident of which is Ma'Rijany Hemp Company, as well as the HEMPY UA Industrial park in Rivne region. This allows to reduce logistics costs and unite companies with the same profile under one roof, which is an important aspect for optimizing production.