Buying and Exporting Soy Beans, Soybean Meal and Soybean Oil from Ukraine

On April 14, 2014 the Verkhovna Rada registered Draft of Law No. 4693 "On establishing the rates of export duties on soybeans, crushed or ground". The Draft provides for the establishment the rate of export duty on soybeans (HS code 120100) in the amount of 15% of the customs value (but not less than EUR 35 per 1 ton) for 7-year term.
The supporters of the duties administration believe that Ukraine has everything for soybean processing and production of wide range of products: food meal, protein products, lecithin, coarse meal and oil, which are in demand in the world market.
And the introduction of export duties should promote capacity of its internal processing, capacity utilization of domestic processing enterprises, to intensify the production of soybean meal, extremely necessary for the needs of the domestic livestock and poultry.
It should be noted, that nowadays, the market of soybean and its derivatives is the fastest growing segment of the oilseed market of Ukraine.
In the last 10 years the number of households engaged in the cultivation of soybeans tripled - from 2.3 thousand in 2003 to 7.7 thousand in 2013.
In 2013 the exports of soybeans and its derivatives according to the official data amounted 1,5 million ton for soybeans, 0,1 for soybean oil and 0,02 for soybean seed meal.
According to the Ukrainian Agrarian Confederation, the largest importers of Ukrainian soybean in 2013 were: Italy - 372 thousand tons, Egypt - 242.8 thousand tons, Turkey - 180.1 thousand tons, Russia - 156.9 thousand tons, Greece - 104.3 tons, Spain - 101, 4 thousand tons.
Experts predict that in 2014, the area under soybean will increase by 20% compared with last year - to 1.7 million hectares, and soybean production - up to 3.2 million tonnes, which is 15% higher than in 2013 (2.8 million tons). And by 2018, Ukraine will be able to produce about 4 million tons of soybeans a year.
The opponents of the duties introduction believe that refiners will get cheaper raw materials in the short term, but then will face the challenge of sales, and as a result, get a price 15% lower than expected.
Based on statistics of the Ukrainian Ministry of Agrarian Policy for the 2012-2013 year, they claim, that absence of any restrictions on the export of soybeans did not restrain the development of this field, and its processing and exports has only increased in Ukraine. They also remind that signing the association agreement with the EU, Ukraine should abolish the export duties.
Therefore, the experts insist, that soybeans processing companies need to learn how to operate in a competitive market, and not to win at the expense of the related industry - agriculture.
They also claim, that introduction of export duties on soybeans may lead to increased production of genetically modified low-protein soybean seed meal, which already greatly exceeds domestic needs of Ukraine (unofficial estimates, today it is more than 50% of soybeans grown).