Restricting sunflower oil export until end of season to lead to loss of $3 bln in forex earnings - UGA
The introduction of quotas on export of sunflower oil by Ukraine by the end of the current season will lead to a loss of about $3 billion in foreign exchange earnings, and may also cause an increase in prices for sunflower and sunflower oil due to the refusal of farmers to grow it, the Ukrainian Grain Association (UGA) said in a press release.
"In the 2020/2021 marketing year (MY, September-August), Ukrainian agrarians grew about 13 million tonnes of sunflower, from which about 6 million tonnes of sunflower oil will be produced. It is expected that about 5.6 million tonnes of oil will be exported, while from year to year domestic consumption does not exceed 400,000 tonnes. Therefore, to provide the budget with foreign exchange earnings, and farmers with additional income, Ukraine is forced to export surplus sunflower oil," the association said.
The UGA specified that Ukraine ranks first in the world among exporters of sunflower oil, and the capacities of domestic oil refiners make it possible to produce a monthly volume of domestic oil consumption in 1.5 days.
It noted the absence of objective grounds for restricting, quoting or licensing agricultural exports, including the sunflower oil production industry, as well as the absence of a shortage of oil on the domestic market. According to it, the decision to restrict the export of sunflower oil will cause an increase in the supply of sunflower, which will lead to a decrease in prices for it in the domestic market and will lead to the refusal of farmers from growing it. Consequently, in the new season, Ukraine will face a shortage of raw materials for processing enterprises, will lose significant volumes of exports, foreign exchange earnings and state budget revenues, and prices for sunflower and sunflower oil will rise even more.
The association said the government had previously tried to introduce export quotas, which led to corruption scandals, deterioration of the liquidity of grain and oilseeds, a decrease in producers' income and foreign exchange earnings in the country. Such actions of the Yanukovych-Azarov government provoked international scandals and Ukraine's failure to fulfill international contracts.