October 11, 2010

Ukraine's grain association calls to dump grain export ban

The Ukrainian Grain Association (UGA) urges the government to finally abandon impositions of any restrictions on grain exports and the intent to sell those quotas in auction.

Ukraine's grain traders believe the intention of officials to revisit the idea of restrictions on crop exports, as well as their desire to introduce the sale of quotas on grain exports through auctions, are irresponsible and contradictory to the principles of grain market, the UGA says.

"We understand the government's desire to fill the state budget; however, the state budget in this case will receive as much as there would be taken out of grain producers' pockets. Someone must pay for the quotas. And it is absolutely clear that precisely grain growers will incur that spending. Since purchase prices will be reduced by exactly the amount to be paid to the state. This is yet another tax on exports," the President of UGA, Volodymyr Klymenko.

UGA notes that, if the government yet decides on the imposition of restrictions and the sale of quotas, this will lead to a complete paralysis of the grain market. Farmers will not be able to get a good price for their harvest, and the majority of domestic grain traders will be forced to cease operations altogether.