According to the Ukrainian traders’ union UGA, the proposed changes to grain trading regulations by parliament could have detrimental effects on Ukraine’s vital grain exports. The union believes that these plans were not carefully thought out and could potentially bring exports to a complete halt.

A bill was approved for its initial reading in parliament on November 21, which proposes alterations to the tax regulations for grain export deals and potentially implementing a minimum export price for grain.

The legislation aims to reduce tax avoidance on specific agricultural goods, including grain and oilseeds.

The union stated that it is worried about the potential cessation of grain exports from Ukraine. This could be caused by the parliament’s approval of hasty changes to legislation regarding grain and oilseed exports. These changes introduce conflicts in the laws, including tax laws.

The statement stated that certain new criteria are unattainable and could lead to significant damages for both merchants and growers.

Before Russia’s invasion in February 2022, Ukraine ranked as the fourth-largest global supplier of grain. In terms of value, grain made up half of Ukraine’s total exports in the previous year.

The University of Georgia stated that the proposed legislation suggests that the minimum prices for export should be at least equal to the average prices of grain quoted on global exchanges in the last 10 days.

Traders stated that this condition cannot be enforced as the minimum export price from Ukraine, determined by this system, may eventually surpass the actual prices in the global market.

According to UGA, the purchase and export prices in Ukraine are influenced by global prices, not the other way around.

In the beginning of this month, Ukraine implemented regulations that mandate food export companies to register, in order to prevent exploitation such as evading taxes when exporting important agricultural products.

Ukraine is a major player in the global food industry, known for its production and export capabilities. However, authorities believe that around one-third of products intended for export are purchased with cash and without proper tax payments.