30 September 2011
A draft law on the introduction of export duties on sunflower oil and the prolongation of duties for grain was published by the Ministry of Economic Development and Trade yesterday on its website. The draft law envisages a 10% export duty on sunflower oil (no less than EUR 84 per mt), a 9% export duty for rapeseed (no less EUR 15 per mt) and the prolongation of current export duties (9-13%) on grain by an additional year to January 1, 2013. Yegor Samusenko: We note this is only a draft law and has not yet been registered in parliament. While the Ministry of Economic Development and Trade proposed the law, the Ministry of Agricultural Policy is publicly against it. Though the Ukrainian government has been supporting sunflower oil producers via a favorable duty regime for a decade so far, we now see a strong desire from the government to increase inflows to the budget, which could even suppress the lobbying power of sunflower oil producers and grain traders. Should the law be passed, it is likely to hurt Kernel’s profit margin in sunflower oil, as the company will not be able to fully pass on the export duty on farmers of sunflower oilseeds.