Opening of the market 5 years ago does not grant we meet it today – Sedik




As one of the leading global agricultural exporters, Ukraine must ensure quality that corresponds to the needs of consumers. At the same time, nothing is set in stone, including the requirements of importing countries, which are becoming more and more selective with regard to the safety of purchased products.

APK-Inform spoke with Vladislav Sedik, the First Deputy Chairman of the State Service of Ukraine on Food Safety and Consumer Protection, about the main tasks the Ukrainian agricultural business is facing now, the key challenges, the most burning issues and the search for a compromise way out of the current circumstances.

- Vladislav, what can you tell about the success of Ukraine as an exporter regarding the strengthening of its positions on the main markets and the development of new ones under the rising competitiveness?

- I always divide this issue into two components. To secure a foothold in the markets and maintain its positions is the main task of Ukraine. Based on the first task, Ukrainian agricultural products are already presented on the main markets. Nevertheless, we clearly understand that we need to develop markets where our presence is weak. In general, today our agricultural products are presented almost everywhere.

At the same time, there is a certain bureaucracy that depends not only on us. When we prepare some questionnaires and are in talks with representatives of new markets, sometimes we can reach the agreements rather quickly, and sometimes these negotiations can last for years and never deliver the results. On the other hand, all phytosanitary or veterinary requirements can be agreed upon, and based on them, we can understand whether they want to see us on this market or not.

- As far as I understand, if Ukrainian agricultural products are presented on the markets, it means that they have suitable quality. But if Ukraine cannot maintain or expand its presence, it means that our products have less attractive prices. Additionally, there is the political aspect...

- The opening of the market 5 years ago neither grant we meet it today, nor grant we will meet it tomorrow and the day after tomorrow. Markets (even in Africa and Asia), which used to be considered less regulated, have changed. There are many new requirements for both GMO and pesticide residues, even veterinary and phytosanitary requirements are being revised. Therefore, in order to just stay on these markets, we must develop our quality and produce goods based on the requirements of these countries. To keep our traditional and promising markets is our main task.

- A number of tariff/non-tariff barriers is growing, phytosanitary state of products is often the subject of manipulation. What problems do Ukrainian traders face most often? For what crops and destinations?

- There are also traditional destinations among such markets. For example, India with its requirement for treatment with bromomethyl. It is prohibited in Ukraine, but every six months we got this regime “turned on” again. There are also situations when foreign policy is involved or when internal economic factors affect the functioning of the market. For example, sometimes quarantine organisms that are absent on the territory of our country are found in batches of Ukrainian agricultural products. This affects the reputation of Ukraine as an exporter, while there is no way to figure out whether they were actually found or not. In general, phytosanitary requirements are often used as a manipulation tool and certain leverage over the country. The existence of procedures for proving something is also an element of pressure. In addition, there are such semi-commercial situations when countries require specific phytosanitary certificates (for example, marked as GMO free), this also has a rather negative effect, because procedurally, we add only phytosanitary indicators into the documentation and we cannot add any other information. In fact, this is also a certain trade barrier at some primitive bureaucratic level.

On the other hand, we have to understand that not everything is so good inside the country. For example, false phytosanitary certificates printed in a printing house are still used in Ukraine. This problem is the most pronounced with container shipments. Only in the last week, fake certificates have been found in two countries. Law enforcement agencies must figure out in detail whether exporters take this step deliberately or do they confide documentation process to unverified and unreliable companies.

- What most pressing issues on Ukrainian argimarket would you point out?

- In general, there are many such questions on the market. For example, now there is active spring field works underway, so the fields will be studied for export of grains to China. China demands the imported barley to be produced on “free fields”, that must be verified by phytosanitary inspectors. This is not a requirement of Ukraine, but an importer (large one), that’s why we are put before quite a difficult choice: to fulfill it and to export, or otherwise don’t do it and not to export.

But what do we have in fact? Traders don’t want to do it and suppose that fields examination and certification is agriproducers’ work. At the same time farmers, in fact, start from price conjuncture only and they don’t care whom to sell barley on the domestic market, and where the product goes later – for them it is the last thing they think about. As a result, in this situation some traders manage to negotiate with agriproducers, others fulfill all the procedures by themselves, and some even ask SSUFSCP and the ministry to eliminate these requirements, because they are difficult to fulfill.

- What is Your opinion in this issue? And how do You plan to influence the situation?

- I personally will be combating a situation when farmer, for example, has certified 150 ha for barley cultivation and, according to the documents, managed to sell the product for two Panamax ships to China to different traders.

All these requirements must have logistical system. There are also many different goods at the terminal, and traders must consider that there are requirements for export to China, other ones to Indonesia, and another to Egypt.

Until then, the process cannot be regulated. What is the point in certification and production of the quality grain, if it is going to be mixed at the closest terminal, then stained going to port, and then mixed again at the terminal or on the ship? There is no common sense and it should be changed.

- Taking into account the specifics of the requirements and the market size, what importing countries do You consider to be the most prospective?

- We must talk about the deliveries and volumes considering the market conjuncture. No matter how liberal the requirements of the importer are. If exporters don’t add up the numbers, no one is going to be interested in such target markets. In any case the price is the main factor. So, the development of the prospective directions, where the demand is confirmed by price, should be in focus.

For example, barley deliveries to China. Earlier the largest share of barley from Ukraine was exported to Saudi Arabia and UAE. But, when China emerged (even with difficult requirements, but good premiums), most barley volumes were rearranged to be exported to this country.

- Just last week SSUFSCP and UGA announced about the founding of the working group to solve problems of grain export, which also every month will consider the notifications of grain importers. What are the hopes for this union, and what issues are to be solved in the near future?

- This union should communicate with exporters and associations. This will allow to solve problems on the export markets and analyze them.

- Changes in the EU Regulations concerning the chlorpyriphos and maximum residue level for chlorpyrifos and chlorpyrifos-methyl became the most discussed issues after coming into force in November of 2020. In the current season Ukraine is lucky and majority of the deliveries were sent before the new requirements, isn’t it? What measures are taken to avoid problems in the future?

- According to the Law on Pesticides and agrichemicals, in Ukraine all the registered pesticides are allowed, and vice versa, all the unregistered are not allowed. Registration of pesticides is handled by the Ministry of Ecology and Natural Resources of Ukraine, so this question is only in its competence. Registration is valid for 10 years. From my part I can say that when we would be rejecting some pesticide, we should understand whether it has an alternative, and study the experience of other agrarian countries.  Speaking of chlorpyrifos, we must understand that while exporting to the EU it has not been banned, but only limited the residue quantity. Moreover, we have a domestic market and many other target markets, where these norms are not controlled. I’ve always said that the chaotic ban on several active materials can lead to the increase in pesticide’s load per hectare. Rejecting one type of pesticide, the producer would possibly have to substitute it for 2-3 treatments by other. This also leads to costs rise for crop production and residual number of pesticides in products.

Interviewed by Anna Tanskaya