Corteva Agriscience, an international agricultural company operating on the Ukrainian market, has started using crop receipts to ensure financing of Ukrainian farmers in the conditions of the volatile market.
According to a press release from the company, crop receipts are available for the purchase of seeds and crop protection products of Corteva Agriscience in Ukraine. “Using this tool, farmers get the opportunity of increasing the credit limit for the purchase of Corteva Agriscience products and defer payment if necessary, and also protect themselves from the impact of changes in product prices,” the company said.
Corteva Agriscience said that issuing a crop receipt will take up to three days and will cost an average of 0.3% of the amount of the financial obligation under the receipt paid for the notary endorsement service.
A prerequisite for issuing a crop receipt is that the farmer owns or leases a sufficient number of officially registered farmland. The sown area for a crop receipt is determined by a special formula that takes into account the expected yield of the client for two years, the price of agricultural products and the amount of the obligation.
“Obligations of a producer on the crop receipt are guaranteed by a pledge – the future harvest of crops such as corn, sunflower and wheat. The amount of the obligation is determined by the formula agreed upon by the farmer and Corteva Agriscience, taking into account prices for agricultural products in a certain quantity and quality, but cannot be less than UAH 1.5 million, which is the minimum amount for using the crop receipt,” the company said.
The National Bank of Ukraine (NBU) in addition to conventional short-term tools of refinancing of banks is introducing long-term refinancing for the period of up to five years, the NBU said on Wednesday. “This step is aimed at meeting several goals at once, related both to maintaining financial stability in the country and stimulating economic growth,” the regulator said.
According to its calculations, the long-term refinancing mechanism will support hryvnia bank lending, enhancing the effect of other measures taken by the National Bank over the past months: lowering the refinancing rate and introducing incentive reserve standards.
“Secondly, the new instrument will serve as an additional guarantee of maintaining sufficient liquidity in the banking system. This, in particular, is also important for the smooth conduct of client operations in the face of deteriorating market sentiment due to the spread of the coronavirus disease COVID-19,” the NBU said.
According to the report, the frequency of tenders to maintain bank liquidity, volumes, terms and other parameters of long-term refinancing will be determined by individual decisions of the Board of the National Bank after consideration of these issues by its Monetary Policy Committee.
The interest rate on long-term refinancing loans will be floating as the NBU refinancing rate, which can be changed in accordance with the decisions of the board, along with a constant value in percentage points, which is valid on the day the loan is issued and will remain unchanged for the entire period of use.
If necessary, banks will be able to repay such loans ahead of schedule at any time.
In order to reduce risks in the provision of refinancing loans, the NBU also improved the standards for collateral instruments, the central bank said. In particular, it is possible to directly transfer the bank’s funds from the repayment of the National Bank’s deposit certificates and income on them to partial early repayment of debt, if the certificates are included in the collateral pool. It is also determined that a foreign currency in such a pool should be placed by the bank on NBU accounts as a cash cover without paying interest on it.
“Thus, favorable conditions are created for the development of long-term lending to entrepreneurs and the population, in particular mortgages, loans for business development and others. At the same time, banks will be able to apply for long-term refinancing in situations where they will need additional liquidity,” the regulator said.
At the same time, the NBU said that today, the hryvnia liquidity of the banking system exceeds UAH 200 billion, the currency liquidity is $8 billion, so the introduction of a new tool is more likely to be preventive in the event of a more serious crisis in the global economy.
The central bank said the introduction of a long-term refinancing mechanism was approved by the NBU Board decision No. 29 issued on March 17 amending the regulation on the interest policy of the NBU and decision No. 30 approving changes to the regulation on the application of standard instruments for regulation of the liquidity of the banking system by the NBU. These changes entered into force on March 19, 2020.
Official rates of banking metals from national bank as of March 19
One troy ounce=31.10 grams
National bank of Ukraine’s official rates as of 19/03/20
Source: National Bank of Ukraine
The association of international pharmaceutical manufacturers AIPM Ukraine has asked Ukrainian President Volodymyr Zelensky to organize a Green Route at customs checkpoints to speed up supplies of medicines in the conditions of panic of the population rushing to buy medicines over the spread of the coronavirus disease COVID-19.
“Manufacturers and importers of medicines, under the current conditions, are trying to meet the demand in full for the appropriate medicines,” the association said in a letter sent to the president.
AIPM Ukraine said that, according to information available from AIPM Ukraine member companies, queues at customs, in particular at the Yahodyn customs post, lead to a significant slowdown in the supply of necessary medicines.
“We ask you to contribute to solving this problem and ensure priority customs clearance of medicines by introducing an official” green corridor “for these categories of goods, as has already been done in the European Union in accordance with the recommendations of the European Commission,” AIPM Ukraine asked President Zelensky .
The association also pointed out the need to establish working interaction on this issue with the customs authorities of neighboring countries, such as Poland, to ensure a similar priority for the customs clearance of medicines at their customs posts to ensure imports to Ukraine.
The RDS group of road construction companies will continue road work during the quarantine established due to the spread of coronavirus, and plans to continue to fully fulfill its obligations, RDS co-owner Yuriy Shumakher has told Interfax-Ukraine.
“We express support for the decision of the Ukravtodor management not to curtail the planned projects. The development of infrastructure in the country is the key to Ukraine’s competitiveness and success,” he said.
“The group of RDS road construction companies minimized attendance at work for the staff, but we continue to fully implement all of our road construction projects,” Shumakher added.
According to him, contractors and suppliers in all regions of the presence of RDS Group are working smoothly, there are no problems with the provision of construction materials.
Ukravtodor on March 17 announced its support for the government’s initiatives to prevent the spread of the coronavirus COVID-19 in Ukraine and continuation of all roadwork as usual.
“Ukravtodor supports the government’s initiatives to prevent the spread of the coronavirus COVID-19 in Ukraine. Therefore, we strongly recommend that everyone who can work remotely take this opportunity. At the same time, we want to emphasize that the deceleration of the season of road works is not yet expected. All construction and repair work continues as normal,” the state agency said.
The Ukrainian group of companies RDS includes Kyivshliakhbud and Rostdorstroy. Its core business is construction, modernization and maintenance of roads and bridges, construction of airfield complexes.
The company is building concrete road H-14 Kropyvnytsky-Mykolaiv. As part of the reconstruction of the H-31 Dnipro-Reshetylivka highway in Poltava region, RDS is building an overpass over the railway and the section of the first concrete road in Ukraine. In 2019, the company won a World Bank tender for work on the first category highway M-03 Kyiv-Kharkiv-Dovzhansky.
As of January 2020, the company operates in seven regions of Ukraine and has ten production facilities.
The ultimate beneficial owners of RDS are Ukrainian citizens Yuriy Shumakher and Yevhen Konovalov. The charter capital of the company is UAH 5.13 million.
QUARANTINE, RDS, ROAD CONSTRUCTION, ROSTDORSTROY, SHUMAKHER, UKRAVTODOR
