The Ministry of Agrarian Policy and Food of Ukraine initiates cancellation of customs duties on grain exports. In particular, the Ministry worked out amendments to the Law "On customs tariff", which provides cancellation of the current export duties on grains, informed Anatoly Razgon, Deputy Chief of the Department of agrarian market development of the Ministry.

According to him, the Government was not satisfied with the volume of grain exports in recent period. The department already submitted the corresponding draft law to the Ministry of Economy.

Since the beginning of the export duties activity on July 1, grain exporters began losing positions on foreign markets. Grain traders said that they could not compete with companies from Russia, because their grain volumes are cheaper by at least 30 USD/t compared to Ukrainian grains. As a result, in July 2011 grain export trading decreased in 5 times to the level of 300 thsd tonnes, compared to 1.5 mln tonnes in June. The Government imposed the export duties for the following grain varieties: wheat - 9% of the contract price, but not lower 17 EUR/t; barley – 14%, but not lower 23 EUR/t; maize – 12%, but not lower 20 EUR/t.

The Government is forced to cancel the duties, according to market participants. The agricultural complex is the main sector of revenue for the country, and the Government needs to adjust the balance of trade, which can explain the actions of the authorities, said Sergei Nalivka, General Director of the agency AAA. For Ukraine, cancellation of the customs duties is the ability to replenish foreign exchange earnings, and for farmers - profit and the possibility of new investments in agriculture.

The most record grain export trading was settled in 2008-2009 marketing year, when the harvest totaled 54.4 mln tonnes, and the exports - 25.03 mln tonnes of grains.

The general export capacities in the Ukrainian ports allow sending abroad of nearly 3 mln tonnes of grains per month. And if the Ukrainian authorities to hasten cancellation of the customs duties, Ukraine will be able to export the declared 24 mln tonnes of grains in the current marketing year, added S.Nalivka.

Alexei Vadaturskiy, General Director of Nibulon, fears that after cancellation of the duties the state-owned company Khlib InvestBud can get the specific preferences (the Government owns 49% of the company shares, another 51% - anonymous private owners). Previously, the company received the largest number of quotas for grain exports, while the leaders of the grain export market did not receive quotas.

AgrimarketInfo