Despite the increase in world prices for crops, prices in the Ukrainian market are still relatively low. If the situation does not change soon, farmers, due to understated sale prices, will lose, about 29 billion UAH in 2012/13 marketing year, the Association "Ukrainian Agribusiness Club" (UCAB) said.

UCAB experts estimate that the difference in the prices for wheat in Ukraine and in the world is $78 per ton, for barley - $33 per ton, for corn - $96 per ton (see table). And they are not in favor of Ukrainian farmers. Experts state that the main factors of understated prices are lack of VAT refund in grain export, high logistics costs, considerable carry-overstocks of grain (due to restrictions that were introduced in the last marketing year to hold the prices), and in some cases - even the difficulties with interregional transportation of grain in the current marketing year. 

Total losses of grain producers in 2012/13 marketing year may be 39 billion UAH, including 29 billion UAH due to price difference, 5.5 billion UAH - losses of crops due to bad weather in May-June and 4.5 billion UAH due to the increased index of regulatory pecuniary valuation of land by 75.6%.

"2012 is disastrous for Ukrainian farmers. This year, the state must provide them with appropriate support to ensure food security and protect domestic agricultural business from phasing down the production. We believe that one of the most effective steps is the recalculation of the index of regulatory pecuniary evaluation of land", - UCAB President Alex Lissitsa stated.

Earlier, agricultural associations of Ukraine sent a letter to the Prime Minister Mykola Azarov to review the index of regulatory pecuniary evaluation of land, taking into consideration the critical position of farmers due to adverse weather conditions.

Table. Calculation of losses of Ukrainian grain producers due to the difference in prices.

* ¹ Wheat and corn are quoted on the stock exchange SWOT (USA), barley – at WCE (Canada)

² The product of the price difference ant the expected yield

³ The exchange rate is 8 UAH / 1 USD

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UCAB Press Office

Tetiana Kotyk

The Association "Ukrainian Agribusiness Club" (UCAB) www.agribusiness.kiev.ua was founded in 2007 to protect the economic and professional interests of players of agribusiness in Ukraine. UCAB is a unique platform in Ukraine for establishing business contacts between the leaders of agribusiness, improvement their work and dialogue with the government. UCAB actively supports Ukrainian producers in establishing and maintaining international business relations. The Association consists of the largest producers and processors of agricultural products in Ukraine.