Information for fruit and vegetables business in CIS
Ukraine: Ministry of Economy initiates export duty for some oilseeds to be 16%
Ministry of Economy of Ukraine proposes export duty for sunflower seeds, flax seeds and false flax seeds to be 16 percent and to decrease 1 percent per year starting from 2007 to the level of 10 percent. This was outlined in the bill "About changes in The Law of Ukraine about Export Duties for Some Oilseeds".
Ministry of Economy supposes that since 1999 when export duty for sunseeds was introduced, oil and fat sector of Ukraine began to stabilize. Availability of seeds on Ukrainian market made possible loading of domestic processing capacities.
Thus during last years profitability of sunflower seed production increased 4 times and made 88 percent. That was a result of introduction 23 percent export duty, which gave some priority to local oilseed producers. The same trend held on after export duty decrease to 17 percent in 2001.
According to Ministry of Economy, today it is necessary to decrease gradually Ukrainian export duty for oilseeds as its introduction has positively affected processing industry. The Ministry also affirms that 17 percent export duty for sunflower seeds, flax seeds and false flax seeds is not a restraining factor for exporters.
Ministry of Economy assumes that yearly 1 percent import duty decrease will not make negative effect on oil and fat sector, while supposed in the bill 16 percent import duty will make Ukrainian processing companies rather competitive in purchasing raw materials.
Preliminary calculations show that State Budget losses from export duty decrease from 17 to16 percent make approximately $891,000 if export of sunflower seeds, flax seeds and false flax seeds remains at the level of 2004.
In future these losses may be compensated on the account of appearance of Ukrainian products, especially agricultural ones, on new markets, which will open for Ukraine after entering WTO.
The matter of export duty decrease is constantly discussed by WTO members under negotiations concerning entrance to WTO.