LD Commodities Ukraine halts business with Ukrainian elevators

Louis Dreyfus Commodities Ukraine, a Ukrainian daughter company of Louis Dreyfus Negoce SA, has stopped purchasing grain at Ukrainian elevators.

The decision was made because Ukraine is not reimbursing VAT (value-added tax), said the Ukrainian Agrarian Confederation.

The same situation with VAT is seen at other Ukrainian grain exporters, and the total debt to them is around UAH3.5 billion (US$438.3 million), according to market evaluations, said the confederation.

Ukraine's grain export potential for 2009-10 marketing year is pegged at 23 million to 24 tonnes. Since the start of the new marketing year that begun in July this year, Ukraine has exported over 12 million tonnes of grain, said the confederation.

Ukraine is expected to harvest nearly 46.2 million tonnes this year, compared to last year's 53.3 million tonnes, said the Agriculture Ministry.

Louis Dreyfus is one of the largest trading companies in the world, involved in agriculture and energy commodities. Louis Dreyfus companies are present in more than 53 countries with 72 offices.

The group's Argentine unit has recently inked a deal to invest US$130 million to develop a grain processing and shipping facility at the Bahia Blanca port complex. The group also established a joint venture with Brazilian soy giant Amaagi in relation to grain activities in the northeastern region of Brazil.