October 5, 2011


Ukrainian wheat producers suffer losses



For every tonne of grain, Ukraine's wheat producers incur losses at UAH200-250 (US$25-31), according to the Head of the Ukrainian League of Industrialists and Entrepreneurs Anatoliy Kinakh.


"Profitability of wheat production has sharply dropped proceeding from the prime cost and the internal price so farmers lose money on every tonne. According to different estimates, the losses are at a minimum of UAH200-250 (US$25-31)," Kinakh said.


He added if profitability of wheat production made up 9.6% last year and the same situation preserves on the agrarian market today, profitability will be negative, up to - 11.5%.


"Therefore, grain production becomes loss-making due to absence of financial resources as farmers are not able to fulfill current agricultural operations," the ULIE head summed up.


As it was reported on September 29, the Economic Development and Trade Ministry proposed to prolong operation of export duties for wheat, barley and corn for a year to January 1, 2013. According to the draft law, it proposed to introduce duties for soy at 12% and rapeseed at 9%.


Earlier, Head of the Verkhovna Rada Committee on agrarian policy and land relations Hryhoriy Kaletnyk said that a draft law was submitted to the Parliament about reduction of duties for export of grain cultures. "This draft law proposes that export duty rates should be no more than EUR1 (US$1.33) for one tonne of wheat, barley and corn. This is just a symbolic discount rate," he said.


In addition, according to the deputy, it is proposed to set duties for soy and rapeseed to the amount of 3%, but not more than EUR2 (US$2.66) for one tonne of soy and seeds.


The Association Ukrainian Agribusiness Club forecasts total losses of agricultural producers to the amount of UAH10 billion (US$1.25 billion) in case of prolongation of customs duties for grain culture export till 2013 and introduction of customs duties for sunflower seed oil and oil-bearing cultures since 2012.

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