UGA opposes minimum export prices for grain

The Ukrainian Grain Association (UGA) believes that the introduction of the minimum price mechanism will lead to a significant drop in grain exports from Ukraine.

In particular, the new mechanism may cause losses to the producer of agricultural goods, UGA said.

“Regulating the price of exporters through the establishment of a minimum price contradicts the norms of the World Trade Organization (WTO), to which Ukraine is a member, in particular the principles of free trade and non-discrimination,” the UGA noted.

The association believes that the implementation of the mechanism of minimum export prices may negatively affect the ability of exporters to fulfill their obligations.

It can also undermine the trust of international partners in Ukrainian counterparties, complicate the planning and financing of export activities, and at the same time reduce the competitiveness of Ukrainian goods on world markets.

“If the minimum prices do not correspond to global price trends, this will destroy competition in the Ukrainian grain market and lead to its excessive regulation and create new broad opportunities for corruption,” UGA explained.

Read also: Minimum export prices will not hinder the market, — Ministry of Agrarian Policy.

Also, according to experts, the new mechanism will destroy the system of forward contracts, which allow exporters to plan logistics operations in advance. The absence of such agreements can lead to delays and increased costs, in particular for insurance.

The association emphasized that, in general, the implementation of minimum export prices leads to the violation of obligations, loss of trust in both the exporting country and litigation, and the reduction of investments in the agricultural sector. This will force importers to “be more careful” when concluding new agreements with Ukrainian exporters.

Previously, USM reported that Ukraine plans to determine monthly minimum export prices for grain. The Ministry of Agrarian Policy explained this by the need to create mechanisms to combat shadow exports.