15:11 08.11.2012

Agrarian Fund buys 280,000 tonnes of 2013 harvest grain under forward contracts

2 min read

The Agrarian Fund of Ukraine as of November 7 had signed forward contracts for the supply of 280,000 tonnes of grain from the 2013 harvest.

"We have signed forward contracts for 280,000 tonnes, and funds from the state treasury fund have come to the accounts of agricultural enterprises," Agrarian Fund Director General Ihor Yakubovych said at a press conference in Kyiv on Thursday.

According to him, farmers are actively submitting applications to sign forward contracts to the Agrarian Fund, and as of now the fund has received applications for 300,000 tonnes of grain.

Yakubovych noted that the fund plans by the end of the marketing year to purchase another one million tonnes of grain under forward contracts.

According to him, the government has changed the form of settlements on these contracts, which has invigorated procurement. In particular, now the Agrarian Fund pays 50% of the minimum intervention price under forward contracts in advance, and the remaining 50% is paid on delivery of the grain, calculated according to the market price of the grain crops.

Yakubovych said that the minimum required batch of wheat supplies to the Agrarian Fund under forward contracts was reduced from 5,000 tonnes to 2,000 tonnes.

In addition, Yakubovych noted that the Agrarian Fund has completed its program of forward purchases of the 2012 harvest crops: In particular, farmers have supplied about 700,000 tonnes of grain on these contracts. About 30,000 tonnes were not delivered to the fund within the terms stipulated in the contract. He said legal actions are being performed on these contracts.

At the same time, Yakubovych noted that insurance companies had paid the Agrarian Fund UAH 7.5 million in insurance claims on contracts that were not fulfilled by farmers.

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