Flaxseed market - cancellation of export duty is necessary (summarized interview with CEO of company SIAIVO Mykola Shkurko)

29-12-2015

The issue of the cancellation of the export duty on flaxseed on the Ukrainian market is very topical.

Though flax seed export is the prospective direction due to its popularity growth on the world market, in Ukraine its exports and production stopped the development. One of the reasons is the state regulation which does not provide the support for oil seed production.

Thus there is the import duty for flaxseed imposed in 1999. This problem is topical for the interests of agricultural producers, processing enterprises, and exporters. The rate of duty of 10% has to defend the interests of the processing enterprises providing the advantage for the domestic price formation.

At the same time agricultural producers have no opportunity to sell the commodity at the world prices and the exporters lose interest for trading flaxseed.

The result is in uncompetitive prices for the domestic flaxseed in comparison with other countries, in particular with Russia and Kazakhstan where there is no export duty.

Export duty cancellation would let the agricultural producers sell seeds at the world prices and renew fixed assets, purchase qualitative seeds and increase production volumes.

If the situation remains the same, the government would enlarge the current problems meanwhile export duty cancellation is to satisfy all the interested sides. As a result, the demand and supply of flaxseed will increase and thus create the ground for production growth, processing enterprises loading and export development.

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