“We have reached the moment when it [grain export] is completely unprofitable if traders don’t receive refunds of the value added tax. If you look back for several years, there were thousands of traders. Only a relatively few remain; famous companies are disappearing before our eyes,” Volodymyr Klymenko, executive director of the Ukrainian Grain Association (UGA), said in remarks delivered at the meeting.
However, this year promises to be a good grain harvest, and exporting continues to be the most profitable option, agriculture minister officials claimed.
“According to our forecast the export potential consists of more than 9 million tons of grain. Of that, wheat represents about 6 million tons. This potential represents the opportunity to earn money and to have income,” the First Deputy Minister of Agrarian Policy Ivan Demchak said.
Talk of potential income brings ironic smiles to the faces of grain traders. In Ukraine, delivering grain from a producer to a ship’s cargo hold is a complicated system in which every step requires a payment. Klymenko provided information that he said shows the expensive process of delivering grain from elevators to ships with traders required to make 22 different payments for services related to the transfer.
“All costs, which are born by those who take the product from an elevator inside the country and deliver it to a ship, add up to more than $40 in Ukraine. In Europe this sum would be $20,” Klymenko said in an interview with FirsTnews.
It's just a lot of bureaucracy and they set the prices according to which, transparent governmental policy, economic forces or administrative needs? Take a guess.