Government temporarily changes agricultural export rules due to Russian attacks
The Cabinet of Ministers of Ukraine has temporarily adjusted minimum permissible export prices for certain types of agricultural products. The decision is intended to prevent a halt in supplies of grains and oilseeds to foreign markets.
The need for the changes arose from Russian attacks in the Black Sea that complicated the operation of ports and the sea corridor. Increased costs of shipping, vessel insurance, and other logistics services have begun to affect the actual value of export contracts.
Under the previous calculation indicators, the minimum price could have turned out to be higher than the actual value of the product, taking into account the increased costs of its delivery. In such a case, companies could not formalize an export contract, even if the deal reflected the current market situation.
The government did not abolish the minimum export price regime but temporarily adapted it to the new conditions. This is expected to allow enterprises to continue the export of agricultural products and avoid the accumulation of grain and oilseeds within the country.
The minimum permissible export price is a lower limit of the value of the goods in a foreign economic contract. Exporting products at a price below the level set by the state is prohibited.
This mechanism operates within the framework of the export support regime introduced to reduce shadow exports, return foreign exchange earnings to Ukraine, and increase tax revenues. Goods falling under this regime may be exported by registered VAT payers.
The regime applies to honey, nuts, wheat, rye, barley, oats, corn, soybeans, rapeseed, and sunflower seeds. The list also includes soybean, sunflower, and rapeseed oil, as well as oilseed processing products.
Minimum prices are separately set for each product and take into account the terms of delivery according to Incoterms rules. Indicators are calculated based on depersonalized customs data on actual export transactions and are reviewed on a monthly basis.
The new rules are particularly important during the harvesting campaign when significant volumes of the new harvest enter the export market. Delivery delays may lead to overflowing warehouses, a lack of working capital for farmers, and reduced purchase prices within the country.
Detailed values of adjusted minimum prices for individual goods are to be published in the decisions of the Ministry of Economy. Exporters must consider the current indicators when formalizing contracts and customs declarations.
Based on materials from: Suspilne, Ministry of Economy of Ukraine
