"Ukroliya" asks to limit the export of the promising crop

Complications connected with export of the national grain lead to the idea to change the structure of agricultural production. Some experts think that grain could be substituted by rape, as this crop is always in demand on the world market. Yet for the time being the rape harvest in Ukraine is insignificant. Moreover, domestic oil-and-fat companies are interested in rapeseed export limitation in order to keep their production running at full capacity and then export ready rape oil. Ukraine must revise its production structure in agriculture. Such opinion was expressed by the former Ukrainian president Leonid Kuchma. In his opinion export support doesn’t match the whole conjecture of the world market. Ukraine could export other kinds of crops, which don’t have to compete so much. Mr. Kuchma also said that last year our country received the orders for almost 1 mln tones of rape seed and rape oil from foreign companies. However, for the time being the volumes of export and production of this crop are still minimal.

However, national producers intend to achieve the limitation of rape seed export. Oil-and-fat companies try to process rape in Ukraine and then export ready oil. Wishing to limit export the association “Ukroliya” develops the draft law connected with introduction of duty on the export of this crop. “Ukroliya” intends to send the corresponding offers to the Ukrainian government very soon.

We would remind that such proposition (to introduce 17% export duty on rape seeds) was made by “KMT” company – this is a shareholder of Vinnitskiy and Chernovitskiy oil-and-fat plants.

The analysts affirm that rape cultivating is a rather profitable business: this crop is always in demand on the world market. A big popularity of rape may be explained by a higher range of possibilities of rape oil usage compared to sunflower oil. For instance it’s used for producing fuel for motor transport (biodiesel).

According to the information from “Ukragroconsult” company, potentially Ukraine is able to sow about 1-1,5 hectares with rape, if the average crop capacity is 25 c/ha. Yet at present only 140-150 thousand hectares are sowed with this crop. At the same time within the last three years the volume of rape export increased from 26 thousand tones till 70-80 thousand tones. As usually the main purchasers of the Ukrainian rape are Baltic countries and Poland.

Ukrainian agrarians mainly cultivate customized rape and on terms of crediting by oil-and-fat plants and traders because the process of nurturing is rather risky and depends on weather conditions very much. Meanwhile, as the director of Kiev agency “APC-Inform” Andrey Yarmak said Western Ukrainian regions feature the most favorable conditions for rape cultivating. According to experts’ estimation, the expenses for its cultivating constitute about 250-300 uah/tone, when the export price of seeds is more than 1000 uah/tone.

Yet there also exist other obstacles for active increase of rape production volume in Ukraine. As mr. Yarmak said, the national agro-producers don’t possess the necessary rapeseed cultivating, harvesting and storage technologies. Moreover, there are no producers of high productive sow seeds. Moreover rape harvesting takes place at the same time with traditional crop harvesting, which gains bigger preference among agrarians. That’s why rape crop is often harvested with some delay and this negatively influences its quality. Finally all these problems lead to a low level of rape harvest (10-11 c/ha), what significantly reduces production profitability.

While commenting the initiative of “Ukroliya” to limit the export of rapeseeds, the experts say that such measure could appear untimely and may negatively influence the profitability of this crop cultivating. Today the price of rape in Ukraine is much lower than the one in other countries of the world. Experts affirm that if export quota is approved the domestic prices will become even lower. If to take into account the low rate of harvest, rape cultivating could become too unattractive.