Ukraine fills its quotas of flour in a fortnight

Ukraine fills its quotas for the export of flour over the period of two weeks. This was stated by Ihor Kobelia, Head of the Ukrainian Flour Milling Company, within the framework of the conference Black Sea Grain 2018.

"The European Union and Brazil are not represented in the structure of the major buyers of the Ukrainian flour. Such consumers are "protected" by quotas. For Ukraine, such quotas are enough for two weeks," he said.

According to Ihor Kobelia, in MY2017/18 the export of Ukrainian flour is forecasted at 390 thou. tons, however, we can expect an increase to 410-420 thou. tons.

He stated that the industry is negatively impacted by the cooperation of Ukrzaliznytsia and flour mills.

"Ukraine leads in the export of oil, our country is the third in grain exports, and the fifth in flour exports. This is a significant indicator for the country. But the monopolist (Ukrzaliznytsia — ed. note) cannot provide a container or wagons on time. The world does not transport flour for long distances by cars within the land territory," the expert commented.

It is worth paying attention to the organization of Turkish flour milling industry. Turkish producers import Ukrainian wheat, process it and export flour to other countries.

"In Turkey, companies that export flour do not pay VAT," Ihor Kobelia said.

The expert also expressed concern about oversupply in the flour market.

"The same happened in the oil market. In Ukraine, the capacity for the production of this product is 25-30% more than raw materials available," he commented.

Reference: export of wheat flour in January-March 2018 amounted to 109.62 thou. tons, which is 18.69% more than over the same period in 2017.