Following the meeting of the Interdepartmental working group on functioning of the grain market under the Ministry of Agrarian Policy and Food of Ukraine on March 25, there was held the press-conference "Development of the Ukrainian grain market in new conditions", organized by APK-Inform Agency.
The press-conference was attended by:
- Vladimir Klimenko, President of Ukrainian Grain Association;
- Rodion Rybchinskiy, Head of Business Projects Division of APK-Inform Agency;
- Dmitry Prikhodko, Economist at the Food and Agriculture Organization of the UN (FAO).
While speaking about the prospects of grain production and the factors, which will affect the general harvest volumes, R.Rybchinskiy noted that in the current year the harvest of grains is expected to reach the level of 57.3 mln tonnes, against 63 mln tonnes in 2013. The situation is caused by the fact that the supply and demand balances do not consider the grain volumes grown at the territory of the Crimea. Also, there is expected some reduction of the yield indices of almost all agricultural crops, due to decreased usage of the expensive material and technical resources. According to the expert, in the current year there is forecasted an increase of oilseeds production: sunflower seed - to 9.7 mln tonnes, soybeans - nearly 3.1 mln tonnes, rapeseed - 2 mln tonnes.
D.Prikhodko said that Ukraine is one of the major grain-exporting countries in the world, and it is important that the Ministry of Agrarian Policy of Ukraine and grain market participants to maintain a constructive dialogue, and to convince investors and countries-importers of Ukrainian grains that Ukraine is able to fulfill its delivery obligations.
V.Klimenko noted that to date Ukraine already exported 27 mln tonnes of grains from the planned volume of 33 mln tonnes. Therefore, the expert expressed confidence that despite worsening of the political situation, in the current season Ukraine will realize its program of grain exports, as there were some months when the export volumes even reached 5 mln tonnes of grains. As for the ports, which are located at the territory of the Crimea, the shipment complexes of the ports usually export nearly 5 mln tonnes of grains.
As for the Azov Sea ports, R.Rybchinskiy noted that last year they shipped 5% of the general grain exports from Ukraine. And if there are any difficulties with passage of cargo vessels through the Kerch Strait, the shipment operations can be realized through such Black Sea ports as Reni, Nikolayev, etc. According to the expert, such problems promote the port infrastructure development of the Odessa-Danube region.
In turn, D.Prikhodko said that if Ukraine is forced to reduce the volume of grain exports, other countries will take its position on the world market. The situation may also have an impact on price formation on the world grain market.
During 5 recent years, the global grain market heavily reacting at the negative factors (export limitations, political factors, natural conditions). If Ukraine reduces the grain exports by 30-50% in the new season, the global prices will increase by nearly 2-4% owing the fundamental factors (if there are no market speculations and if the other main exporters to keep its grain production unchanged), said the expert.
Another issue which was raised by participants of the press-conference - the VAT refund on grain exports in Ukraine. V.Klimenko said that if the Government can find the funds to fulfill the rule, the budget should include the separate item for refund of the VAT, which would allow avoiding various corruption schemes. However, the Ministry of Finance of Ukraine still did not support the proposal yet.
