Unscrupulous agricultural producers, amid a low harvest, are trying to disrupt the previously concluded forward contracts for the supply of grain, which could collapse the grain market of Ukraine and provoke disastrous results both for the agricultural sector and for the country’s economy as a whole already in the current marketing year, Ukrainian Grain Association (UGA) President Mykola Horbachev believes.
“Today, many unscrupulous producers, seeing an increase of market prices, want to refuse to fulfill the previously concluded contracts, in fact to make a default. And we are not talking about those agrarians who lost crops due to drought or other weather disasters, but those who had good harvest,” he explained in an exclusive commentary to the Interfax-Ukraine agency.
Because of this, Ukraine may lose a source of about $11-12 billion to finance the agricultural sector, he said.
Horbachev also said that companies that did not suffer from drought in some regions of the country are trying not to fulfill the previously signed contracts for the supply of grain, aiming to get excess profits at the expense of counterparties. Such unfair actions will inevitably lead to both economic and reputational losses for the entire economy of the country.
According to the UGA assessment, in the spring, the agrarians contracted about 6 million tonnes of maize of the current harvest on forward contracts at a price of $150-160 per tonne, thus receiving financing for the sowing campaign.
FORWARD CONTRACT, GRAIN MARKET, UGA
