The European Dairy Association (EDA) supports the extension of preferential treatment for Ukrainian dairy exports to the EU, according to the March issue of Dairy Flash.
“As EDA, we have made clear our support for the extension of the European Commission’s “zero quota, zero tariff” approach when it comes to Ukrainian dairy exports to the EU. It goes without saying that we expect compliance with the principle of reciprocity in the trade approach,” the EDA stressed.
The corresponding statement was made at the 6th Forum “Civil Society EU-Ukraine” that was held by the Trade Service of the European Commission with the participation of business organizations, environmental groups and non-governmental organizations of the EU and Ukraine.
EDA is a European platform of dairy processors, uniting cooperatives, private dairies, world dairy industry leaders, as well as small and medium-sized companies operating in the dairy sector. It has a major think tank. EDA committees and working groups work to ensure a sustainable dairy base in Europe, to unlock the potential of EU domestic markets, and to ensure growth in global dairy processing.
Ukraine will temporarily refrain from exporting grain and sunflower to Poland until the new season in order to solve the problem of overstocking the Polish market and protests of Polish farmers, the Polish Ministry of Agriculture and Rural Development reported, citing Ukrainian Minister of Agricultural Policy and Food Nicholas Solski.
“We all understand who is to blame for this situation, but we must solve the problem. Therefore, Ukraine will refrain from exporting wheat, corn, rapeseed and sunflowers to Poland (until the new season),” the Polish agency quoted Solsky from a joint press conference on Friday with his Polish colleague Robert Telus at the border with Ukraine in Dorohusk.
“The Ukrainian side made a proposal to very much limit for some time, and at the moment even stop the flow of grain to Poland,” Telus said, in turn.
As reported, April 5, Ukrainian President Vladimir Zelensky at a meeting with Polish Prime Minister Mateusz Morawiecki in Warsaw said that the parties have found a way out of the problem of Ukrainian grain exports to Poland.
“We discussed the issues of our farmers – Polish and Ukrainian. We have found a way out. I believe that in the coming days, weeks we will finally solve all the issues, because there cannot be any difficulties between such close partners and real friends as Poland and Ukraine,” Zelenski said.
Earlier, the governments of Poland and Romania announced their intention to ask the European Commission to develop mechanisms that would help avoid price dumping to the detriment of local farmers.
Polish farmers threatened to disrupt the events during Zelenski’s visit to Warsaw, and Polish Minister of Agricultural Policy Henryk Kowalczyk resigned.
If the international community had been able to “push” Russia to increase ship inspections in the Bosporus, Ukraine would have been able to reduce the flow of grain traffic through European countries, Solsky said then, in turn.
The association of enterprises “Ukrmetallurgprom” considers it necessary to temporarily ban the export of scrap ferrous metals to provide metallurgical enterprises with strategically important raw materials in the conditions of the ongoing war.
“If scrap metal will remain in the country – more than 500 thousand people will have a job, and the country will have millions of foreign exchange earnings from the export of steel. At the same time, the military also benefits – because metallurgists help the fighters a lot, buying for them equipment and cars, and even producing body armor. Nobody benefits from the export of scrap metal. So now the authorities should be proactive and temporarily ban exports until the situation stabilizes and stops threatening national economic security,” wrote Ukrmetallurgprom President Oleksandr Kalenkov in his column on the Interfax-Ukraine website.
According to him, since the beginning of the war Ukraine’s mining and metallurgical complex has been experiencing the worst crisis since independence. A large part of the enterprises have been seized or destroyed by the occupiers, while others are trying to work under constant shelling and partial loss of capacity. The blockade of sea ports has led to the fact that the geography of customers has almost halved, and with it the volume of supply of products.
Nevertheless, enterprises are trying to hold on and even increase production, because they realize the level of responsibility entrusted to them. More than half a million Ukrainians work in the metallurgical and allied industries, and MMC’s share in Ukraine’s GDP is over 10%.
“But the reality throws up new challenges every time. One of them was the shortage of scrap metal, without which it is impossible to increase the metallurgical production”, – said the head of the association.
He named the reasons for the deficit: the occupation of the eastern regions, where traditionally significant volumes of raw materials have been procured (the volume of this raw materials has decreased by almost 80%). At the same time the export of scrap metal has increased sharply: only in the first two months of 2023 about 25 thousand tons were exported, which is almost 60% more than in November-December 2022.
“Given the growth rate of the export indicator, at the end of the year we may see a figure of 250 or even 300-400 thousand tons of exports – and this is absolutely unacceptable for a market that can barely collect about 1 million tons of scrap metal per year. After all, the industry will require more than a million – even in conditions of incomplete resumption of production,” wrote the president of Ukrmetallurgprom.
“Now the situation with the shortage has worsened and began to lead to temporary, but so far, production stoppages. However, the issue must be resolved. And the volume of production instead of growing, will fall to a minimum. This, in turn, will provoke a spiral of new problems not only for the industry, but also for the economy – because, let me remind you, even in the toughest year of 2021 the MMC enterprises paid to the budgets over 42 billion gon. And this is exactly the funds, for which Ukraine can build up its military potential and win on the battlefield”, stated Kalenkov.
He added that Ukraine, losing money because of the drop in production, does not earn anything from scrap metal export – the raw material is exported via the European Union, where a favorable export duty of EUR3 is applied, and from there it is redirected to the actual customers. To export raw material directly to customers would cost EUR 180 export duties and the Ukrainian budget lost already EUR 350 mln on it. Not surprisingly, the State Bureau of Reconstruction and Development has already taken an interest in the export schemes and has already launched an investigation.
As Mr. Kalenkov explained, 1 ton of scrap metal processed by the president of Ukrmetallurgprom into steel gives 10 times more to the budget than the export duty payable to the EU – about $300 per ton. Therefore, the question whether to export raw materials or leave them in the country for processing, should not be – the benefits are obvious, he summarizes.
As reported in the middle of 2021, Ukrmetallurgprom asked to ban the export of scrap until the end of 2023. With a corresponding request Ukrmetallurgprom appealed to the Prime Minister of Ukraine Denis Shmygal in a letter dated July 8, 2021.
According to the Ukrainian Association of Secondary Metals (UAVtormet), the export of scrap metal in January-February 2023 amounted to 24.8 thousand tons compared to 7.1 thousand tons in January-February 2022 (an increase of 3.5 times).
A new video has been released on the YouTube channel of the Club of Experts, in which the Kyiv-based think tank Club of Experts and the Ukrainian Exporters Club presented a joint study on the main risks facing Ukrainian companies in exporting goods in 2023.
Yevheniia Lytvynova, President of the Ukrainian Exporters Club, emphasized that exporters should consider five key risks for their business: currency risk, payment risk, production risk, transportation risk, and bureaucratic risk.
“Understanding these risks is critical for successful exports, especially in the current geopolitical situation, exporters should consider these risks and plan at least 3 months in advance when cooperating with foreign companies,” Lytvynova said.
The experts also reviewed the state of Ukrainian exports in recent years.
“Over the past year, the situation in Ukrainian exports has undergone significant changes. Poland, Romania, and Turkey have become Ukraine’s main trading partners,” explained Maksym Urakin, founder of the Club of Experts.
He added that in 2022, Ukraine exported goods worth $44 billion, which is 35% less than in the previous year. The main profit in the global market came from the export of grains and vegetable oils, although exports of metallurgical products declined.
The Club of Experts and the Club of Exporters also emphasized the importance of supporting Ukrainian exporters in the current global market environment.
“We recommend Ukrainian exporters to contact our clubs with questions about certification, access to foreign markets and opening production facilities abroad. We are always ready to help and advise,” emphasized Yevgeniya Litvinova.
She urged Ukrainian companies to be active in the global market.
“We want Ukrainian companies to maintain competitive prices for their goods while working with foreign partners. Do not hesitate to contact us with any questions related to exports,” added Ms. Litvinova.
Yevheniya Lytvynova urged Ukrainian companies not to lose hope and to actively develop their capabilities.
“Ukrainian exports have great potential, and we believe that cooperation with the Club of Experts and the Club of Exporters will help companies realize it,” she said.
In conclusion, the speakers noted that they plan to devote the next session to imports and import-related risks. They called on all stakeholders to join the discussion and explore new opportunities for the development of export-import business in Ukraine.
The experts also emphasized that in order to enter new export markets and verify counterparties around the world, we suggest that Ukrainian exporters consider products and solutions from Dun & Bradstreet, the world leader in the market of information on legal entities.
Watch the full video here:
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CLUB_OF_EXPERTS, CLUB_OF_EXPORTERS, EXPORT, EXPORT RISKS, IMPORT, INCOTERMS
Exports of agricultural products from Ukraine in March 2023 increased by 12% compared to the previous month and reached a record 7.8 million tons since the war, the Ukrainian Confederation of Agrarian Business (UCAB) said in a statement on its website.
“51% of exports in March 2023 were made through the work of the “grain corridor”, and the rest through alternative export routes. However, it is necessary to take into account that not all products had time to physically cross the border,” UCAB pointed out.
According to the data of UCAB, in March 2023, vegetable oils showed the largest increase in the structure of exports – by 28%, to 556.2 thousand tons, oilseeds – by 23%, to 683.1 thousand tons, cereals – by 10%, to 5.7 million tons (corn – 67%, wheat – 29%, barley – 4%) and oilcake – by 10%, to 454.7 thousand tons (sunflower – 83%, soybean oil – 17%).
According to analysts, the important news for the Ukrainian export in March 2023 was the continuation of the “grain corridor”.
“The existence of such an export channel gives hope to Ukrainian agrarians to realize the rest of products of the 2022 harvest and receive funds to continue their economic activities, beginning from the spring sowing season, which is already in full swing”, – the UCAB noted.
The main problem is the significant gap between the world price and the price of major crops on the Ukrainian market. Reducing of this gap would help farmers to accumulate funds for the purchase of fertilizers, pesticides, the use of which will be minimal this year due to limited financial resources of farmers, UCAB summarized.
Ukraine managed to export 265 thousand tons of sugar in 7 months of the current marketing year (MY, September 2022 – August 2023), which is 4.8 times more than in the entire 2021-2022 marketing year, said Nazar Mykhailovyn, acting Chairman of the Board of the National Association of Sugar Producers of Ukraine Ukrtsukor.
“For the entire period of 2021/2022 MY, 55 thousand tons of sugar were exported. From September 1, 2022, to March 28, 2023, Ukraine increased exports by 4.8 times to 265 thousand tons,” he said in an interview with Interfax-Ukraine.
According to Mikhailovin, in 2022, 23 Ukrainian sugar factories produced 1.33 million tons of sugar, while a year earlier 33 enterprises produced 1.45 million tons. “The reduction in sugar production by 120 thousand tons with 30% of production capacities not used was not critical for Ukraine. In addition, we had a surplus and significant carry-over balances from 2021/2022 MY in the amount of 491 thousand tons,” the head of the association said.
He reminded that as of the beginning of the war, sugar exports from Ukraine were suspended due to the hostilities. On June 5, 2022, the Cabinet of Ministers adopted a resolution to allow sugar exports under licenses issued by the Ministry of Economy. Due to the hostilities and the lack of seaports, Ukraine was forced to change the geography of exports. According to the European Union’s decision, Ukraine can ship sugar to Europe without tariff quotas and duties.
According to Mykhailovyn, due to drought and poor sugar beet harvest, as well as higher natural gas prices than in Ukraine, Europe produced less sugar, and it was more expensive than Ukrainian sugar. “Ukraine was able to sell sugar in Europe at a decent price,” he stated.
