New draft law foresees a 3% export duty on sunflower oil

Two MPs from the Svoboda faction filed a draft of a law which foresees charging a 3% duty for the export of unrefined sunflower oil, starting from 1 January 2015. The document was filed for review by five relevant Parliament committees.  

Roman Topolyuk: It’s too early to price in the new possible regulation into the earnings’ estimates of the largest Ukrainian bulk oil exporter, Kernel (KER PW) in 2015. Just as a downside risk, we estimate that if adopted in its current wording, the bill could bring USD 30 mln additional annual expenses to the company.

In general, the legal framework in the sector is going through changes, some of which will benefit agricultural producers, while other would mean additional costs or a decrease of state support. For example, the mandatory certification of grain export and grain storage facilities operations was cancelled, according a bill which was approved at the end April. We estimate that the savings for Kernel from the effects of this law will comprise around USD 15 mln a year.  On the dark side, the IMF is discussing with government a reformatting of state support to agriculture producers through a special VAT regime. The reinstatment of VAT redemption for grain exporters, a strongly positive regulation, was shifted to October 2014, as a part of country-wide austerity measures, approved in April.