Ukrspyrt has suspended shipment of alcohol for export due to the increased demand for medical alcohol in Ukraine because of the spread of the coronavirus COVID-19, the company has said.
“We have taken the state’s position, first of all, to take care of Ukrainians. Due to the coronavirus pandemic, we are seeing an increased demand for medical alcohol not only domestically but also externally. Therefore, we decided to suspend export of alcohol. First we need to fully provide the Ukrainian market. We consider it is unacceptable if medical institutions turn to us with a request to sell alcohol, but we don’t have it. Therefore, we take care of the needs of our medical sector,” Ukrspyrt acting head Serhiy Bleskun said.
The company indicated that exports would be restored after the domestic market of Ukraine is fully provided.
As reported, Ukrspyrt in 2019 increased its net profit by 1.9 times compared to 2018, to UAH 40.3 million. Alcohol production fell by 5%, to 5.9 million decaliters.
State-owned enterprise Ukrspyrt is a large producer of alcohol and alcohol containing products in Ukraine. It is managed by the Ministry of Economic Development, Trade and Agriculture. Its total production capacity is more than 36 million deciliters per year. The work is provided by 41 production sites, while in March 2020 only ten are operating.
Now the company is being prepared for transfer to the State Property Fund for privatization
The U.S. Department of Agriculture (USDA) in March raised its forecast for the export of major oilseeds from Ukraine in the 2019/2020 marketing year (MY, September-August) by 460,000 million tonnes compared to the forecast in February, to 5.51 million tonnes. According to a March report released on the USDA’s website, the forecast for rapeseeds export was increased by 200,000 tonnes to 3 million tonnes, soybean exports by 310,000 tonnes to 2.45 million tonnes.
At the same time, the U.S. Department of Agriculture lowered its forecast for oilseeds processing by 200,000 tonnes to 17.42 million tonnes, meal exports by 110,000 tonnes to 5.77 million tonnes, and vegetable oil exports by 60,000 tonnes, to 6.6 million tonnes.
The USDA forecasts that in the 2019/2020 MY exports of sunflower oil from Ukraine will be at the level of 6.2 million tonnes, sunflower meal at 4.9 million tonnes, sunflower at 60,000 tonnes.
In addition, the U.S. Department of Agriculture predicts a sunflower crop in Ukraine at 16 million tonnes, production of sunflower meal at 6.5 million tonnes, sunflower oil at 6.78 million tonnes.
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Structure of export of services in Ukraine in 2019 (graphically)
The situation with coronavirus should not considerably influence the Ukrainian grain export, as the demand for agricultural products depends on number of the population, which is growing, and it is less elastic than the demand for fuel, consumer goods or tourism services, acting Director General of the Ukrainian Grain Association (UGA) Serhiy Ivaschenko has said.
According to him, since the outbreak of the coronavirus epidemic in China, Ukraine has not yet felt on its part the decline in demand for cereals.
“However, it should be remembered that certain logistic restrictions, such as a ban on entering ports for ships that visited regions where coronavirus disease is detected, or credit restrictions due to the collapse of economies, can negatively affect international trade,” he told Interfax-Ukraine.
Ivaschenko said that such physical and financial limits could well have a negative impact on the dynamics of Ukrainian agricultural exports.
“At present, oil and fuel producers are experiencing a drop in demand and prices amid expectations of a decrease in transportation. A slowdown in a large economy such as China will certainly have a negative impact on other economies. If effective methods of combating coronavirus are not found in the near future, then the consequences for all the economies of the world will be very negative – an economic crisis may begin,” he said.
At the same time, the expert added that a drop in international trade will lead to an increase in product stocks and lower prices for it in the domestic market of Ukraine, as well as a drop in export revenue and national budget revenues.
The enterprises of Ukroboronprom concern exported $908 million worth of arms and services abroad in 2019, which is 19% more than a year earlier, said Aivaras Abromavicius, the head of the Ukroboronprom state concern. “Last year, our companies exported arms and services worth $908 million. This is a 19% increase over the previous year,” the head of the concern said on the Real Politics program on Ukraine 24 TV channel on Sunday.
Abromavicius added that Ukraine is not one of the ten largest arms exporters, while U.S. and Russian exports are ten times greater than domestic, but assured that Ukroboronprom’s foreign supply will also increase in 2020.
“We see that in 2020 export growth is planned to reach 30%. And this is a very important figure, especially in anticipation of a slowdown in industrial production growth, which is taking place not only in our country, but throughout the world,” said the head of Ukroboronprom.
