CommodiTrader

On February 15, 2011, the Agrarian Committee of the Verkhovna Rada of Ukraine directed project of the law #8053 on making of amendments to the Law of Ukraine “On State support of the agriculture in Ukraine” (concerning peculiarities of realizing exports of the commodities subject to the state price regulation) to the further updating.

As a reminder, previously the Main scientific-and-expert department of the Verkhovna Rada recommended to decline the draft law in accordance with findings in the first parliament reading.

According to the department, imposition of the offered limitations on agricultural products exports will not meet regulations of the current Grains Trade Convention (1995), and several other Laws of Ukraine.

The majority of exporters and market participants, including the Grain and Feed Trade Association (GAFTA), also became opposed to acceptance of the draft law.

The Grain and Feed Trade Association (GAFTA) is very concerned with the recent developments in Ukraine, in particular the draft law #8053 on making of amendments to the Law of Ukraine “On State support of the agriculture in Ukraine” (concerning peculiarities of realizing exports of the commodities subject to the state price regulation), informs the letter of the association dd. February 15, sent to the Chairman of the Verkhovna Rada of Ukraine.

According to the letter, it is hard to believe that the document can be approved, as it is in contradiction to all known standards of free trade and market, giving the priority to the State agent to export agricultural products, thus introducing pure monopoly on the market. GAFTA underlines that the draft law contradicts to international standards and many domestic legislative acts.

If trade partners of Ukraine have no possibility to perform own contract obligations, they will decide to withdraw own investments in the grain industry.

According to preliminary estimations, in 2010, grain production in clean weight in countries of the Commonwealth of Independent States totaled 134 mln tonnes, down 28.8% compared to 2009 results, informed the Intergovernmental Committee of Statistics of the CIS.

The largest grain volumes among the countries were produced in Russia – 60.9 mln tonnes (down 37.3%), Ukraine – 39.2 mln tonnes (down 14.8%) and Kazakhstan – 12.2 mln tonnes (down 41.5%).

The following countries increased grain production volumes compared to the previous year: Moldova – 2.4 mln tonnes (up 11.5%), Uzbekistan – 7.4 mln tonnes (up 0.5%).

In 2010, Belarus produced 7 mln tonnes of grains, Azerbaijan – 1.9 mln tonnes, Kyrgyzstan – 1.6 mln tonnes.

Russia will possibly prolong the current grain export ban after July 1, 2011, - till the autumn (October 2011), informed Elena Skrynnik, Minister of Agriculture of the Russian Federation, adding that the Government will take decision concerning grain exports future, after receiving of the resulting data of the harvest-2011.

According to her, in 2011 grain production will possibly total 85 mln tonnes, which will be sufficient to cover all demands of Russia in grains.

As a reminder, on August 15, 2010, Russia imposed the ban for grain exports, in October 2010 the Government prolonged the limiting measures till July 1, 2011, or the beginning of the new grain season.

The Government of Ukraine passed-on 13 additional enterprises, which previously were in the structure of the state stock company “Khleb Ukrainy”, to the state company “State Food-Grain Corporation of Ukraine”. The corresponding decision is attached in the Cabinet of Ministers Decree #85 dd. February 9, 2011.

As it was announced in August 2010, the Government accepted the decision to found the state company “State Food-Grain Corporation of Ukraine”. The State Operator gets elevators, cereal products plants and grain depots. Also according to the document, previously the Government provided 36 subsidiary enterprises of the state stock company “Khleb Ukrainy” to the new company structure.