News
20.07.2016
The UCAB Association calls to abolish export custom’s tariffs for flax and false flax’s seeds
The Association Ukrainian Agribusiness Club stands for abolishment of export tariffs for seeds of flax and false flax. Nowadays 10% export custom tariff is applicable in Ukraine for sunflower, flax and false flax’s seeds aiming to facilitate internal processing in the country to expand export of oils and other processing products. Nevertheless, such custom tariff has no any crux concerning flax’s seeds. International market operators don’t deal with flax’s oil. Thus, flax’s seeds trade value on global markets has reached M 868 USD, whereas global value of flax’s oil trade counted only at M 121 USD.
Considering mentioned above, export custom duties are negative for national producers, pushing down their competitiveness ability comparing to those countries which do not implement similar practices. Average flax’s export price in the RF and Kazakhstan estimated at 425 USD and 397 USD accordingly, at the same time, average price for Ukrainian flax – 419 USD being incompatible on international markets considering extra 10% tariff to the price above.
“Major reason of the tariff introduction was oil seeds internal processing stimulation in Ukraine to develop export of products with higher value added, but in the case of flax business implemented tariff has demotivated production. Oil flax is a niche business in Ukraine with narrowed demand and low processing level, thus there is only one way to expand internal production and it is optional through export development, but at the current time existing tariff demotivates Ukrainian business to do so,” – said Vitalii Kordysh, expert of agro markets at the Association Ukrainian Agribusiness Club.
