The deputies of Verkhovna Rada rejected the bill about abolishing export duty on sunflower seeds. In the first reading the bill initiated by deputies Igor Miroshnichenko and Alexander Mirnyy was supported by 93 members of the Ukrainian parliament.
To date, the export duty on sunflower seeds is 10%. The question about its cancellation became of a high priority during writing the Agreement on the free trade zone between Ukraine and the EU. According to the representatives of specialized companies, for the time being the duty is the deterrent in exporting seeds. However, if such measure is canceled, as it was required by the European side, the export of crop will get out of control completely.
According to the experts, the domestic processers of sunflower cannot withstand competition with exporters, since the funds turnover of the former will be much higher. Thus, Ukraine will simply get the status of a raw materials appendage of the EU. This situation is very advantageous for Europe as today European oil extraction plants experience a serious feedstock shortage.
However, some large Ukrainian sunflower oil manufacturers affirm that the situation with the duty is not so dramatic. According to them, the domestic plants are not under a serious threat of undercapacity, even in case of export duty cancellation. This is because the oil branch of Ukraine is already quite integrated into the international market. Anyway, oil producers buy raw materials at market prices, thus they will be provided with sunflower seeds even in case of relief of protection policy by the authorities.
For reference: today Ukraine is the leader in the world on manufacturing and exporting sunflower oil. According to the analysts of USDA, in 2013/14 MY Ukraine's share in the world production of the product may reache 28%, the volume of export could be 55.64%.
