March 14, 2011

Ukraine may change grain export quotas with levy

Ukraine is likely to replace its current grain export quotas with export duties in a proposal to make shipment procedures more transparent, analyst UkrAgroConsult said Friday (Mar 11).

"This was stated by a presidential official after trade organisations... international financial organisations, including the IMF, had repeatedly addressed the authorities criticising them for the government policy on grain exports," UkrAgroConsult said.

Government authorities were unavailable for comment.

Ukraine introduced grain export quotas in October to prevent a rise in domestic bread prices.

The initial quotas allowed exports of 2.7 million tonnes grain but in December the government increased the total volume to 4.2 million tonnes.

But traders have said quota allocation procedures were unfair and not transparent and many of them had failed to obtain any quotas.

Ukraine's government said last month it was considering a draft law that would allow only the state-run grain company and producers, not private traders, to export agricultural commodities.

Gilles Mettetal, director of the European Bank for Reconstruction and Development's agribusiness unit, said this week grain export limits introduced in Ukraine to address food security concerns were making investors re-think commitments in the region.

The EBRD sent a joint letter with the IMF and World Bank to Ukraine's Prime Minister last month airing concerns that a proposed state-controlled grain export monopoly could deter future private sector investments in the country's agricultural industry, but no response has been received, Mettetal said.