Ukraine amends VAT reimbursement bill for oilseed exports

Ukraine’s parliament voted on Dec. 21 to change again
its Dec. 7 amendments to the tax code that eliminates VAT on the export of
sunflower seeds, rapeseed and soybeans. The new bill provides for full
reimbursement of VAT on the export of sunflower seeds and a temporary freeze of
VAT reimbursement for exporters of soybeans (September 2018-end 2021) and
rapeseed (January 2020-end 2021).

Recall, lawmakers voted on Dec. 7 to cancel
VAT reimbursement of sunflower seeds, rapeseed and soybeans as of March 2018.
This initiative drew fierce resistance from farmers, many of whom had already
sown winter rapeseed on a total of 0.87 mln ha to be harvested in summer 2018.

Alexander Paraschiy: The news is
positive for farmers that have been already sown winter rapeseed – like Mriya
Agroholding (MRIYA) and KSG Agro (KSG PW). But it’s still not clear why Ukraine
needs to introduce a temporary moratorium on export VAT reimbursements for
2018-2021.

In any case, limits on exports of rapeseed and
soybeans will likely benefit local processors of oil crops, including Kernel
(KER PW), Astarta (AST PW) and MHP (MHPC LI). But a positive effect on their
value will be minor, in our view.