KYIV, July 20 – Ukraine’s government approved a series of resolutions on Thursday to prevent massive exports of cheap grain from the country, agriculture minister Ivan Kyrylenko said.
Speaking after a government meeting, Kyrylenko told journalists that all grain export contracts must be registered on special commodity exchanges that would allow the government to exclude dumping or illegal deals in the trade.
“If a company wants to trade third class wheat at half the world wheat price, we will cancel such contracts and suspend the activity of this commodity exchange,” Kyrylenko said.
The ministry, which has been blamed by President Leonid Kuchma for the country’s serious shortage of milling wheat, says it will do its best to maintain prices at their current high levels for as long as possible, noting that exports may be cut this season.
Kyrylenko said the resolutions followed a recent presidential decree, which ordered the government to start buying grain directly from farmers and to establish new rules for Ukrainian grain exports.
Some traders have already voiced concerns that the new rules could undermine private business and stressed that the decree did not clarify the mechanism for grain exports, but created a system which favours exchanges.
Kyrylenko also said the government had adopted prices to be paid by the state for its direct purchases from farmers. Farmers can sell grain to the state at this price and have the right to buy it back for the same price plus the cost of storage.
The minister gave following details for the grain prices (excluding VAT):
3rd class wheat Hr 420 ($77.22) per ton
4th class wheat Hr 380 ($69.87) per ton
5th class wheat Hr 330 ($60.68) per ton
rye Hr 360 ($66.19) per ton
barley Hr 380 ($69.87) per ton
maize Hr 360 ($66.19) per ton.
Officials have said up to 500,000 tons of grain might be purchased in this way in the 2000/2001 season.
