Ukraine has imposed minimum export prices for certain oilseeds, grains and vegetable oils effective December 1, 2024 to streamline foreign revenue inflows.
Hitherto, traders have been purchasing fast-moving grains and oilseeds from farmers in cash and then exporting them at low prices.
To prevent this, the government has published base prices which will keep changing each 10th of the follow up month.
The price-fixing plan partially seeks to offset the unruly export regime occasioned by the conflict with Russia.
The customs office will be determining the prices after reviewing the previous month’s, inclusive of a 10% discount.
First appearing on the government’s portal in September 2024, the pricing plan was originally to take effect in November 2024.
The September publication had 12 commodities under prohibition to export below set minimums, per the U.S. Department of Agriculture (USDA).
Targeted export products include honey, walnuts, wheat, rye, barley, oats, corn, soybeans, rapeseed, sunflower seeds, vegetable meals and three vegetable oils.
Positive view on the Ground
Exporters however feel that the change will not effect their shipping returns for similar past controls brought no radical export shifts.
In fact, many expect the Agrarian Ministry to set prices that are nearly as low as the traders currently set for themselves.
Another positive development is that efffective December 1, 2024, traders will only need value added tax (VAT) registration to secure export permits.
According to Interfax, the government cancelled export licensing of various produce such as grains and legumes on November 29, 2024. What this means is that licensing control measures will become less stringent so that VAT-paying traders can reduce redundancy.
The cancellation will also help the customs to concentrate fully on tracking the inflows of export revenue.
It will also reduce the drag of export clearance at customs, whose current delays owe to licensing review.
Exceptional to this rule will be the unchanged licensing of oilseed, corn and wheat shipments to Bulgaria, Hungary and Poland, among other countries. Hungary and Poland are two of three countries Ukraine had sued over extended grain import ban in September 2023.
In short, price hoarding informs Ukraine’s decision to render minimum export prices of agricultural produce. To learn more about the export pricing of agricultural goods by the eastern European nation, read on the statistics below.
Ukraine Agricultural Export Prices Statistics
Ukraine is one of the top exporters of agricultural produce in the world, consistent with affordable pricing. Its top export is maize or corn, whose 2022 volume hit 25.2 million tonnes, the fourth highest worldwide. Its other major agricultural exports are wheat, oilseeds and vegetable oils. Below is a look at the pricing performance of two of its top exports, wheat and oilseed/oil.
How comparatively cheap are wheat export prices by Ukraine?
Despite being a top 5 exporter of wheat, Ukraine ranks lowest among the 15 top wheat-exporting nations in prices. In 2022, for instance, the country averaged $239 per tonne, the 15th among the leading 15 major exporters. Canada and the United States had the highest prices in 2022 in this select club at $429 and $407 a tonne, respectively.
How high are Ukraine’s oilseed and vegetable oil prices?
When the monthly FAO Index shrunk in December 2023 by 1.4% for oilseeds and 1.5% for vegetable oils, Ukraine also experienced a fall. For instance, the export price of sunflower/safflower oil fell from 1,225 per tonne in 2022 to $0.842 per tonne in 2023. Rapeseeds, the main oilseed in the country, meanwhile lost from $0.495 a tonne in 2022 to $0.386 a tonne in 2023.