Ukraine cancels export duties for wheat and maize

Ukraine's parliament on Friday cancelled export duties for wheat and maize but kept in place the levy on exports of barley. The law, supported by 272 members of the parliament, needs to be signed by president Victor Yanukovich and published to come into force.
The former Soviet republic imposed the duties in July and traders have said the measure slashed Ukrainian exports as Ukrainian-origin grain could not compete with cheaper Russian grains. Ukraine plans to boost its grain harvest to 50-53 million tonnes of grain in 2011 after drought restricted the harvest to 39.2 million tonnes in 2010.
Farm Minister Mykola Prysyazhnyuk has said the country could export 24-25 million tonnes of grain in the 2011/12 season, but the existing export duties have raised doubts shipments could reach those levels. He told Reuters this week exports could reach just half the previously expected record volume if export duties on grains remained in place.
Ukrainian traders said this week that grain exports rose to about 1.48 million tonnes in September from 1.4 million in August. The director of Ukrainian Agrarian Confederation (UAC), Serhiy Stoyanov, told Reuters Ukraine had exported about 3.3 million tonnes of grain in the first three months of the current 2011/12 season against 3.5 million in the same period in 2010/11.
The former Soviet republic last year limited grain exports by quotas and sold abroad 12.7 million tonnes of grain in the 2010/2011 season. Grain export duties replaced quotas. Export duty on wheat is 9 percent but no less than 17 euros ($24.30) per tonne. Export duty on barley is 14 percent and no less than 23 euros per tonne. Export duty on maize is 12 percent and no less than 20 euros.
Stoyanov, who called the decision on cancelling duties a 'victory', said however there was no reason to expect sharp changes on Ukrainian domestic and export markets. "I see no sharp movements on the markets in the nearest future. The key niches are already occupied by Russian, Romanian, Kazakh grains. Our return to the markets will be step-by-step and difficult," he said.
Ukraine harvested 22.2 million tonnes of wheat in 2011 and exportable surplus could total 10 million tonnes this season. Ukraine exported 1.5 million tonnes of wheat in the first three months of this season. "The market needs time to understand the changes and I do not think that Ukraine will boost its exports in the near future," a trader from large foreign grain house told Reuters.
"The law could increase offers on the local market", he said. The parliament rejected a proposal to impose low-level duties on exports of Ukrainian sunoil, soybean and rapeseed. The draft law had included an article setting export duty for sunoil at 3 percent of custom value but no more than 5 euros per tonne. The duty for rapeseed was proposed at 3 percent but no more than 2 euros per tonne, while the duty for soybean was proposed at 3 percent but no more than 2 euros per tonne.
Ukraine's Economic Development and Trade Ministry last week said it had drafted its own bill that would slap duties on exports of sunoil, rapeseed and soybeans. The ministry has proposed the following new export duties: 10 percent but no less than 84 euros per tonne for sunoil, 9.0 percent but no less than 15 euros per tonne for rapeseed and 12 percent but no less than 33 euros per tonne for soybeans. Ukraine is the world's biggest exporter of sunoil and local producers have said high export duties will cause a shutdown of at least a half of Ukrainian sunoil plants.