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27 April 2024

News

08.11.2012

Grain exports regulation shall be applied as last extreme measure only

Export restrictions in the grain market is the last of the possible options for its control and shall be applied only in case of extreme necessity - the Association "Ukrainian Agribusiness Club" (UCAB) stated.

UCAB experts support the current balance, whereby the potential of Ukraine's exports for the current marketing year is 5.5 mio tons. Moreover, statistics on grain stocks as of October 1, 2012 shows that the wheat stocks are at the level of 10.5 mio tons, which is 24% less in comparison with the last year.
"Formally, there exist reasons for grain exports restrictions" – says Alex Lissitsa, the President of UCAB. However, according to him, the very history of regulation of the last three years, marked by the introduction of export quotas and duties, and also the ban on exports that is, most likely, to be imposed, indicate at the presence of systemic problems.

General Director of UCAB Volodymyr Lapa claims that two main issues are the efficiency of state market regulation and provision of competitiveness of baking industry concerning the purchase of wheat. "Agricultural Fund improved its work this year, starting from setting the intervention prices and ending with the publication of data on the volume of purchases and payments" - notes Mr. Lapa. However, it is crucially important for the Agrarian Fund to have the opportunity for timely payment – that means the timely allocation of budget funding in appropriate amounts. Similarly, one should take measures towards the enhancement of the competitiveness of the milling and baking industries. It can be done through the use of a wide range of tools, starting from soft loans for the purchase of grain at national and regional levels and ending with localization of future contracts that would allow domestic consumers to hedge their risks both in price and volume.

UCAB hopes that relevant work will be carried out before the harvest of 2013. "Restrictions do not have a positive influence on image of Ukraine and companies - emphasizes Mr. Lissitsa. - We should not calm down in case of the restrictions’ imposition, but rather form a serious work strategy for 2013 to exclude the repetition of such precedents."

UCAB also believes that in case of the imposition of restrictions the prevention of price decrease for wheat in the domestic market should become one of the main short term priorities, because due to adverse price trends the farmers will be limited in the possibility of full funding of technological operations in the production of winter and spring crops of the harvest of 2013.
 

 




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