Following the principle “Always promote development of free trade”, The Grain and Feed Trade Association (GAFTA), jointly with Ukrainian partners – Ukrainian Grain Association (UGA) and the project “Agroperspektyva” – organized the II International Grain Conference “Trading together” in Kiev.
On September 7-8, 2005, guests from 25 countries arrived to Kiev. Representatives of 250 companies met to discuss the situation in grain markets of Ukraine and Western Europe and in the world market in general. GAFTA chose Ukraine not by chance, because Ukraine is fairly known as “breadbasket of Europe”, and its grain market always had strategic importance. Grain means welfare of agricultural producers, food safety of the state, importance of Ukraine in the world market.
The conference was conducted under the slogan “Trading together”. When opening the conference, the President of UGA Nikolay Kompanets noted that this event would become an important stage for further development of grain business.
Members of the conference got immediate information about the situation in prospective grain markets, as well as answers to exciting questions – about activities of the state agents, activities and contracts of GAFTA.
The President of GAFTA Ronny Maas expressed his wish and hope that the conference would promote the development of business and grain infrastructure in general, confidently extend the scope of its business contacts and information.
The Adviser of the President on agrarian questions Leonid Kozachenko appreciated the state policy in the grain market and described investment possibilities of this market. According to Leonid Kozachenko, an investor, who comes into the country, cannot manage his risks, a half of which belong to the sphere of policy risks: this is the consequence of policy instability, non-transparent actions of the Government regarding the VAT reimbursement.
The conferees of the grain forum discussed the infrastructure of Ukrainian grain market, tried to define the issues that prevent Ukraine from being a valuable member of the world grain market.
The General Director of UGA Vladimir Klimenko accented attention of the conferees to the issue of competitive ability of Ukrainian grain in the circumstances of over-expensive marketing chain. Grain traders lose current assets throughout the entire chain by paying for various services of sea, railway, auto transport, as well as various port-charges. But the purchase price paid to domestic producers consequently decreases for the respective amount, which is very important.
Expert of the project “Agroperspektyva” Alena Starostenko informed the conferees about the structure of grain production in Ukraine and the extent of differences in the production structure taking into account the conditions of international markets. Currently, Ukraine is really capable to produce over 50 MMT of grains annually, including 27 MMT for domestic consumption, 25-26 MMT for export.
The representatives of Ukrainian companies discussed with colleagues from other countries the pluses and minuses of work in the grain market. The representative of “Nibulon Ltd.” Anton Miroshnichenko noted that it is not easy for Ukrainian companies to work on domestic market, because state authorities not always understand the business. And the most difficult problem is VAT reimbursement to exporters of grain. “In Europe, VAT reimbursement exists and these procedures are well-established – constated A. Miroshnichenko. – Our Company during the years of its activities invested over UAH 600 million in agriculture, but, because of inconsistent approach of the state to VAT reimbursement to exporters, we have to and continue to fight”. Private business in Ukraine has many claims to state operators in the grain market.
Future perspectives of Ukraine in the world grain market, difficulties in the relationship between the state and private business were discussed on the conference. The authorities are not always ready to ensure equal, stable conditions for all market participants. In spite of these factors, Ukrainian grain is more and more seriously presented in the world.
Representatives of foreign companies “Alcom Brokerage”, “Souflet”, “DLJ”, “SGS” etc. risen the issues, most often faced by market participants. Particularly, the General Director of GAFTA – Pamela Kirby Johnson informed the conferees about genetically modified production, the Biological Safety Protocol, about GAFTA trade safety guarantees system. Freight and logistics issues were also discussed. Issues of contracts, purposes and advantages of contracts and GAFTA arbitrage rules, settlement of disputes and conflicts between GAFTA members were intensively discussed in detail.
In conclusion, priority tasks and plans regarding companies’ work in grain markets of Black Sea region countries were discussed. One of such tasks is familiarization of foreign members of the Association for grain and forage trade in Ukraine (GAFTA), protection of the Association members by Ukrainian trade committee GAFTA. A special advantage of GAFTA is protection of interests of its members and support to the development of free trade.
With starting of work of GAFTA Kiev office, Ukrainian companies received a unique opportunity to benefit from 127-years’ work experience of this Association, with its help to get fair place among grain producers and exporters at the international level and to facilitate the way of integration of Ukrainian grains into the world market and of traders – to the world grain elite.