January 26, 2011

Ukraine, Russia to revisit grain pool creation scheme

The Russian Federation, Ukraine and Kazakhstan is considering once more the idea of the grain pool creation in order to lessen grain shipments to the buyers of the said countries.

At first, the idea was announced on the World Grain Forum in St. Petersburg in June 2009. However, the reporting countries did not arrange real actions after that.

Nikholay Prysiazhnyuk, the Head of the Ministry of Agrarian Policy of Ukraine, while answering the presentation of Saktash Hasenov, the Deputy Ministry of Agriculture of Kazakhstan, during the Forum "Agriculture and Food industry development in the East Europe and Central Asia", which was within the International exhibition "Green week 2011" on January 21, in Berlin.

S. Hasenov complained that Kazakhstan, being one of the largest grains suppliers, wheat first of all, feels dependence upon Ukraine and Russia, due to the necessity to use their ports for grain supplies.

Due to the fact, exporters had to expand own export geography and start to supply grains to other directions, in particular to the South-East Asia and Iran. In order to realise the project, the country started building new railway through Uzbekistan, at the border with China the country will build large grains terminal, and started also realisation of other projects. According to him, China and the Republic of Korea face the interest in Kazakh grains.

N. Prysiazhnyuk noted that due to the fact, it is reasonably for three countries-Russia, Ukraine, and Kazakhstan-to found the grain pool, in order to decrease logistics costs. Then there will be the opportunity to make replacement within the country and have cheap logistics, in order to sell cheap grains to countries-buyers.

While talking about the prospects of participating of Ukraine in the Customs Union, N. Prysiazhnyuk noted that the government does not consider the issue at all.

As it was previously announced, to date there is active grain export ban in Russia (until July 1, 2011), and Ukraine imposed grain export quotas till March 31, 2011.