November 30 2006, 10:14

Ukraine: the decreased tariff rate for apple export comes into force on December the 1st; hundreds times increased import is a result

The Law of Ukraine №2775-IV "About changes to some Laws of Ukraine" came into force in August 2005. This Law adopted some changes to Custom Tariff of Ukraine. One of the most contradictory positions was the changed import tax for apples in winter period (December 1st till March 31st) from EUR0.5/kg to 5% of the shipment value. In line with our forecasts, the decreased rate became the reason for multiply increased volumes of imported apples, and also for the decrease of the illegal apple import to Ukraine. According to official statistics, 100 to 600 tons of apples were delivered to Ukraine in 2002-2004. Additionally, some contraband volumes of apples were supplied. But, import volume was rather modest; import apples cost very expensive in winter period.

After the changes to Custom Tariff have entered into force, and the custom control has become more rigorous, around 40,000 tons apples in the second half of 2005, and around 75,000 tons of apples during 9 months of 2006 were supplied to Ukraine. In total, according to the forecasts of the Agricultural Marketing Project (AMP), more than 100,000 tons of apples will be imported to Ukraine in 2006.

National producers defined the abrupt price decrease for apples in winter period as the main negative factor of the simplified external trade. According to AMP evaluations, in early 2006 the apple prices were in average twice as low as they would be without the decreased tariff rate. At the same time, the prices were enough high to provide the feasible apple production. The continuous intensive establishment of new orchards confirms this fact.

Moldova and Poland are the main apple suppliers to Ukraine; they fulfill more than 90% of the supplies. These countries will probably preserve their leadership in season 2006/2007. The prices for marketable apple are 2-2.5 times lower today in Poland than in Ukraine. This fact predetermines a very profitable trade.

Maxim Yenchenko, the AMP Market Information Specialist, will present the details of the influence of the decreased tariff rates, as well as other trends of external trade of fresh produce in Ukraine during the third international conference "Fruits and Vegetables of Ukraine 2006. Open Market".