A new instruction on grain accounting can disrupt grain exports

The draft order (the new grain instruction) of the Ministry of Agrarian Policy and Food of Ukraine contains risks for the Ukrainian grain exports.

This information was publicized by AgroPolit.com in the article "Over the abyss in the port — will the new instruction on the grain accounting disrupt grain export?"

The document determines that the formation of the grain export batches "can only be carried out by grain storage facilities that operate in seaports."

The Association of International Freight Forwarders of Ukraine (AIFFU) criticizes the draft order "On approval of Instruction for quantitative-qualitative accounting of grain and its processing products on grain warehouses and grain processing enterprises."

"The cargo owners created a wide network of the seaport elevators and grain warehouses, which today provide shipment of a large part of the national grain exports. Adoption of the mentioned above rule means the extrajudicial defeat of the Ukrainian entrepreneur's rights to continue the legal activity," the AIFFU reports.

The article says that the norms of the proposed document discriminate against companies on a geographical basis. After all, "a number of warehouses located in dry ports and out of seaport territory remain outside the law."

"The norm leaves unprotected the investments from private business, which allocated money for the development of the port infrastructure, and the document creates conditions for unfair competition in the grain logistics market. In the current formulation, the instruction obliges the cargo owners to transport grain from the territory of the port warehouses to the internal port warehouses, and only after the consignment will be shipped. The complicated procedure of export batches shipment will lead to the increase of the agro-logistics costs and will give the ground for corrupt practices," the Association explains.

The new instruction also introduces the problem of grain mixing in warehouses. According to AgroPolit.com, the draft instruction is now being reviewed by the executive power authorities. The signatures of the Ministry of Economic Development and Trade of Ukraine and the State Regulatory Service of Ukraine are still missing.

"We hope that during this time, the authorities and businessmen will find a common language and a compromise solution. After all, in case of delayed or disrupted exports, the issue will be faced by the customers at the international level," the article concluded.

Let us remind that as of August 10, 2017, Ukraine exported 3.95 million tons of grain in 2017/2018 MY, which is 5.3% less compared to 4.17 million tons in 2016/2017 MY.