The Union of Dairy Enterprises of Ukraine (UDMU) and the Polish Polish Dairy Chamber (Polska Izba Mleka) call on their governments to actively address the dairy sector of both countries, which arose due to political turmoil in spring 2023, while respecting the principles of free trade.
“We want to express our concern about what is happening to the dairy sector right now. We, as an industry, want to ensure that our firms and our farms are continually operating for our consumers. We don’t want small groups that are not connected to the dairy sector to complicate our relations,” Agnieszka Maliszewska, director of the Polish Dairy Chamber (Polska Izba Mleka), said Friday at the first Ukrainian-Polish Dairy Dialogue, which was held at Interfax-Ukraine.
The executive director of UMSU Arsen Didur reminded that since June 2022 the European Union had abolished all customs duties and quotas for Ukrainian products for a year, which was of mutual benefit to the economies of Poland and Ukraine, and the dairy sector in particular, so this regime has been extended for another year.
The executive director of the SMPU expressed regret that since April 2023 in relations between Ukraine and Poland “some incomprehensible actions began to occur. “These events have not benefited our brotherly relations and trade relations as well,” he stated.
Didur said that representatives of the Polish and Ukrainian dairy sectors do not intend to remain indifferent to what is happening and have developed a single coordinated position, insisting that any unlawful interference in business does not benefit either party.
“Although Poland has a stronger position in the mutual trade of dairy products, the LSU is categorically against the interference of the two governments and the creation of problems in free trade. We do not accept both the ban on deliveries of Ukrainian dairy products to Poland and the creation of any additional veterinary control from the Ukrainian side. All actions of the governments should be based on the principles of democracy, free trade and the rule of law”, – emphasized the executive director of UMSU.
Industry associations of Poland and Ukraine have invited leading experts from both countries for a dialogue to unveil the results of the two countries’ trade in dairy products during 2022-2023 and to show the groundlessness of any restrictions on trade between the two countries.
An analyst at the International Food & Agri Hub BNP Paribas Poland Pawel Wierzykowski said that before a full-scale invasion of Ukraine by Russia in 2021, Ukraine was the third largest market for Polish dairy products with a share of 5% after Germany (19%) and the Czech Republic (7%). In particular, 10.5% of all exports of Polish cheese and cottage cheese, 5.3% of yogurt and 3.4% of butter were sent to Ukraine.
According to the Polish expert, in 2022 the share of exports of dairy products from Poland to Ukraine has decreased to 3.3%, but the Ukrainian market still remains a very important export vector for Polish dairy products outside the European market.
In monetary terms, export of dairy products from Poland to Ukraine in 2022 decreased by 13% compared with the prewar year 2021 – down to EUR 108 million. In 2022 Poland reduced the supply of whey to Ukraine by 32%, cheese – by 31%, milk and sour cream – by 28%, while at the same time increased the supply of yogurt by 3%.
At the same time for 4 months of 2023 a positive tendency was observed and the export of Polish dairy products to Ukraine increased, – said Wierzykowski.
He noted that Poland is the largest European supplier of dairy products to Ukraine with 50% presence. In particular, in the structure of European supplies the share of Polish products in Ukraine reaches 79% for milk and sour cream, 79% for yogurt, 72% for cheese, 51% for curd, 44% for whey powder and 15% for butter.
The expert does not consider the decrease of the trade balance by three times in 2022, to EUR43 million compared to EUR121 million in 2021, as this figure was EUR42 million in 2020 and the minimum level of EUR6 million was recorded in 2015.
According to his information, similar fluctuations were observed when Poland joined the EU, when specialists from Germany and Poland could not predict the consequences of opening markets, but markets reacted adequately and the situation leveled off within a few years.
The expert of the Institute of Agrarian Economics Leonid Tulush thanked representatives of Polish dairy products for the fact that they gave Ukraine the opportunity to sell surplus dairy products, which were formed in Ukraine due to the outflow of main consumers, in particular to Poland.
“Since the beginning of 2023, in five months the situation in the Ukrainian-Polish trade balance of dairy products has radically changed. In the first quarter, imports of Polish dairy products to Ukraine 5 times exceeded the corresponding figure for exports of Ukrainian dairy products to Poland. For 5 months since the beginning of the year the ratio has increased up to 7.4 times,” he said.
Tulush reminded that in April 2023 Ukrainian dairy products were not delivered to Poland at all. In May the products were delivered in 2 times less than in March of this year. At the same time, Polish products come to Ukraine steadily and supplies exceed EUR9.5 million per month in money terms.
“If we talk about the balance in terms of individual types of dairy products, the positive balance for Ukraine is observed only for milk powder and butter. For all other items the volume of Polish imports significantly exceeds the volume of Ukrainian exports, “- said the Ukrainian expert.
Speaking about the significance of the Polish import for the Ukrainian dairy sector, Tulush pointed out that while the share of Polish imports of dairy products to Ukraine exceeds 45%, the export of dairy products from Ukraine to the Polish market is only 8%.
Comparing the structure of export-import, he stressed that Ukraine supplies to Poland mostly dried milk, butter and whey powder. At the same time, the share of milk powder is 75%. Speaking about the structure of import of Polish dairy products to Ukraine, here, according to him, prevail cheeses of various kinds with the share of 75% and 10% account for dairy products and whey.
“This shows that the volume of mutual trade between the countries is not comparable. Ukrainian dairy products are not a threat to the Polish dairy market,” stated the Ukrainian expert.
Alexander Samokhvalov, director of Lustdorf, one of the largest dairy producers in Ukraine, pointed to the reduction in the domestic dairy market in Ukraine due to the departure of main consumers – women and children from the country and noted the importance of exports to save the work of dairy companies. According to him, there is a constructive cooperation between the producers of dairy products in Ukraine and Poland.
In particular, Lustdorf was only able to make it through 2022 by increasing exports of milk powder to the EU. Due to the loss of opportunities to export products by sea, the company is forced to transport products through the EU, particularly Poland. Recently, however, it has been idle at the border for two to three weeks or more, Samokhvalov said.
Director of the Polish Dairy Chamber (Polska Izba Mleka) Agnieszka Maliszewska stressed that both sides are recording the same problems on both sides of the border, in particular with logistics. She urged the veterinary and customs services to solve them as soon as possible.
“The best solution to problems is mutual dialogue, not protests. Especially protests by those groups that do not represent the interests of our sector, but adjust to them. It is important for us that those groups that create problems for us do not tell the Polish or Ukrainian government how to act,” she stressed.
At the end of the first Ukrainian-Polish Dairy Dialogue, both associations will send the governments of Poland and Ukraine a joint statement with proposals for resolving the situation.
Traffic in the center of Kyiv will be restricted due to events on Friday, and will be restored later, the press service of the Kyiv City Military Administration reports.
“Tomorrow, June 16, in connection with the events during the day, traffic on the central streets of Kyiv will be restricted,” the statement said.
It is reported that the resumption of traffic will be announced later.
The KCSA urged drivers to plan their routes in advance.
Minister of Agriculture and Rural Development of Romania Florin Barbu intends to ask the European Commission to extend restrictions on imports of agricultural products from Ukraine until the end of the year and expand the list of banned for the import of agricultural products.
“The ban is valid until September 15. I will hold a discussion with my colleagues from other countries, and we will ask for an extension until December 31. In addition to rapeseed, wheat, corn, sunflower, I will try to add up to 10 more products,” Euractiv quoted Barbu as saying in the Romanian Parliament on Wednesday.
He said the list of import bans could include honey and meat, as well as “other Romanian priorities so that farmers can sell local products.”
As reported, the EU ban on imports of wheat, corn, rapeseed and sunflowers from Ukraine came into force on May 2 and replaced unilateral decisions to ban imports by countries bordering Ukraine, particularly Poland, Bulgaria, Hungary and Slovakia, in violation of the Association Agreement and EU internal regulations as of April 28.
As noted by the EU, Bulgaria, Hungary, Poland and Slovakia undertook to cancel unilateral measures on these and all other types of agricultural products originating from Ukraine, as well as to allow free transit.
On June 5, the European Commission extended until September 15 restrictions on imports of wheat, corn, rapeseed and sunflower seeds from Ukraine to Bulgaria, Hungary, Poland, Romania and Slovakia, considering that the problems provoked by such imports have not yet been overcome. The new regulations do not allow these grains and oilseeds to be supplied to the markets of these countries under contracts concluded before May 2.
Romania was the only one of the five frontline countries that did not impose a ban on imports of Ukrainian agricultural products before the official decision of the European Commission.
The Verkhovna Rada Committee on Finance, Tax and Customs Policy amended the government bill number 8401, proposing to postpone from July 1 to August 1, 2023, the abolition of the 2% single tax and other benefits adopted at the beginning of the war for entrepreneurs, said the head of the committee Daniel Getmantsev.
“Business inspections and fines for businesses in Ukraine will be resumed from August 1, not July 1 as previously planned,” he wrote in Telegram on Tuesday.
According to him, the Finance Committee has developed clear rules for the transition from the payment of 2% single tax on other taxes, proposed a moratorium on certain types of inspections (in particular, most inspections of 1-2 groups of single tax payers) and restrictions on the inclusion of taxpayers in scheduled inspections.
It is also planned not to take into account the “technical debt” for the period from April 2022 until July 2023 in determining the ability of single tax payers to remain on the simplified system.
Hetmantsev said that the amendments preserved the possibility of voluntary payment of the single tax and ERU for taxpayers of groups 1-2, which had a tax address in the areas of military operations (including possible hostilities) and the occupied territories.
The updates stipulate that no fines and penalties for late repayment of the tax debt in the case when the debt was corrected by the taxpayer itself to zero. In addition, exemption from financial responsibility for violations in the field of RRO (except for trade in excise taxes), if they are committed in the temporarily occupied territories or territories where military operations are (were) taking place, is proposed by the order of the Ministry of Reintegration.
The head of the committee noted that these are not the last changes and the work on the bill is still ongoing.
Deputy Head of the Committee Yaroslav Zheleznyak said that the number of amendments to this bill has already exceeded 1700, most of them were filed by the faction “Fatherland” – almost 50%.
He also stressed that, given the schedule of the Rada and the number of amendments, we should not expect the adoption of the bill before July 1.
As Ukrainian News earlier reported, draft law number 8401 was adopted by the Rada in the first reading on the eve of the IMF mission – May 29, when it was supported by 226 MPs.
The bill proposes to cancel the possibility for sole proprietors and legal entities to be single tax payers of group III with the application of the single tax rate of 2% of the amount of income and to resume payment of single tax for the I and II groups of sole proprietors.
It also provides for the resumption of documentary inspections, but during martial law they will be held in the presence of safe access to areas, premises and other property used for economic activity and / or are subject to taxation, as well as documents and other information related to the calculation and payment of taxes, fees.
This bill is one of 19 structural beacons of the four-year $15.6 billion Extended Funding Facility (EFF) program for Ukraine, which the IMF Board of Directors approved on March 31. The deadline for its implementation – the adoption of the law – in the program is set until the end of June.
The program’s scheduled schedule calls for three tranches of SDR664 million ($893 million) to be disbursed to Ukraine after the first tranche in mid-June and October of this year and in late February of the following year following the first, second and third revisions, when the fulfillment of obligations is estimated for the end of April, June and December of this year, respectively.
Samples of sea water in the water area of Odessa showed an excess of pollutants and a sharp drop in salinity due to the Russian occupants of the dam of the Kakhovskaya hydroelectric power plant on the Dnieper, but no cholera pathogens were detected, according to the Telegram channel of the Odessa City Hall “Odessa. Officially” on Tuesday.
“In samples of seawater sampled on June 10 from points in Odessa cholera pathogen and cholera-like vibrios were not detected … In samples of seawater sampled at the beach “Langeron” excess of iron in 4.8 times, salinity below the norm in 2.7 times; in samples taken at the 16-th station B. Fountain samples recorded excess of suspended solids in 1.8 times, iron – in 5.2 times, the salinity is 2.9 times below the norm,” the statement said.
At the same time, it is reported that the drinking water supplied to Odessa complies with sanitary norms. “Drinking water corresponds to the State sanitary norms and rules 2.2.4-171-10 “Hygienic requirements for drinking water intended for human consumption”, – reported in the City Hall.
The Odessa City Council reminded that the order of the Odessa Regional Military Administration of July 16, which established a special mode of movement of citizens in certain areas of the Odessa region, prohibits staying on the Black Sea coast, in particular within the beach areas, is still in force.
The All-Ukrainian Agricultural Rada (AAR) and the Association of Milk Producers (AMP) will hold a mirror strike in response to the protest started by Polish farmers against the transit of Ukrainian agricultural products through Poland and will not allow Polish trucks into Ukraine.
“In protest against the actions of Polish agricultural producers who began a strike and blocked the border crossing point (BCP) “Dorohusk – Yagodin” for cargo with Ukrainian grain, domestic agricultural producers decided to act in the mirror,” – noted in a press release of the WAR.
It is emphasized that Ukrainian agrarians have taken a strong stance to protect their interests and the domestic agricultural sector. During the strike, they will block the movement of Polish trucks through four international checkpoints, viz: The checkpoint “Dorogusk – Jagodin” on the Ukrainian side, in the municipality of Krakivets near the checkpoint “Krakivets-Korcheva”, in the village of Rata near the checkpoint “Rawa-Russkaya” and in the village of Shehini near the checkpoint “Shehini-Medika”.
The action will begin on June 10 at 10:00 and will last until 00:00, June 14.
As reported, for several days, Polish farmers have been blocking the PP “Dorohusk – Jagodyn” in protest against the influx of Ukrainian grain to the Polish market.
Only vehicles carrying humanitarian aid are allowed to pass. As part of the protest, two trucks with humanitarian aid will pass from Poland to Ukraine per hour, and none from Ukraine to Poland.
According to data for Friday morning, about 320 heavy trucks stood in a nine-hour queue to leave Poland for Ukraine at the Dorohusk border crossing point. According to the Ukrainian side, there were 3,185 trucks registered in the electronic queue to enter Poland.
The Polish protest is expected to last until midnight on Monday.
