Ukraine legislatively restricted grain trading within the country
Grain trading in the country is very limited, first of all, legally.
This was announced by Valenti Selvesyuk, the Head of the Agro-Trading project of UMG Company, in his interview with Elevatorist.com.
"When I talk about trading, I mean FOB and CIF markets. In Ukraine there is also CPT, but trading in the country is still very limited, primarily legally", added Valenti Selvesyuk.
According to him, trading is legally limited, because in order to return of VAT it is necessary to track the entire chain of intermediaries. And if there are a lot of them, then the opportunity to get VAT back is lost.
"Such rules kill trading, as such. Liquidity within the Ukrainian market is very low. This is the result of the socialism era — the manufacturer should be as close to the consumer as possible, because the farmer works hard growing grain. The miller-buyer also works hard making flour. A trader is considered to be just a speculator benefiting on their work", said Valenti Selvesyuk.
He added that trading is not just about adding a surcharge to a product and selling it at a higher price. This is a risk. It often happens that a trader loses money on a deal. A loss transaction is also part of trading.
"There is no understanding on this matter either in the government or in Ukrainian society. In their perception, the trader is the one who gets a big and dishonest profit for something which is not completely comprehensive", summed up Valenti Selvesyuk.
We would like to remind that in the first quarter of 2017, the largest share of goods in the export structure was produced by the AIC and food industry (44%).