All market participants have to follow and comply with the rules of grain market - UGA




The Ukrainian Grain Association (UGA) addressed the government of Ukraine and the Ministry for Development of Economy, Trade and Agriculture of Ukraine to stimulate market participants to execute their obligations and signed contracts and comply with the existing laws, declared the President of the Ukrainian Grain Association, Mykola Gorbachev within the press-service on October 26.

This year, amid growing prices of grain, “there are producers and trading companies who decided do not execute their forward contracts for grain delivery.”

“The UGA is deeply sure that the government and the relevant ministry create rules of the game on the grain market as well. All market participants have to follow and comply with these rules. Otherwise, we will see the scaling back of the investments from international companies who provide up to 30% of planting campaign financing”, - M.Gorbachev pointed out.

If the international companies suffer losses due to default of forward contracts, they will cut the limits of forward contracts financing for next seasons.

“Ukraine exports 55-60 mln tonnes of grains. The agricultural sector could lose about 11-12 bln USD of financing. Moreover, banks will stop crediting producers or raise sharply credit rates due to risks of defaults. It will result in decline of grain production and export in Ukraine”, - he summarized.