Kyiv, Ukraine, Tuesday, September 2, 2003

State Joint-Stock Company "Khlib Ukrainy" plans to import in September the first portion of grain from Kazakhstan in the amount of 40,000 tonnes under the intergovernmental agreement, the company's Head of Board Mykola Kucher has informed.

Ukraine plans to buy from Kazakhstan about 1.2 million tonnes of grain at a price of about 600 to 750 hryvnias per tonne ($113 to 141/t, transportation costs and VAT included). Out of this amount 800,000 tonnes will be purchased under the intergovernmental agreement and another 400,000 tonnes - under business contracts between Ukrainian and Kazakh firms.

According to forecasts of market operators, import of grain to Ukraine in the 2003/04 marketing year (July to June) will constitute about 3 million tonnes.

According to updated forecast of grain market experts, taking into account the performances of harvest of early grains and pulses and weather conditions in Ukraine, total grain crop in the country should be expected in the amount of 22.7 to 25.5 million tonnes. The government earlier forecasted the crop in the amount of 28.8 to 30.8 million tonnes.

KYIV.......President Leonid Kuchma demands abandoning excessive application of administrative forceful methods to agricultural and industrial complex, considering market mechanisms a priority.

Press service of the President informed Ukrainian News of this matter with reference to Kuchma's meeting with the President of Ukrainian Union of Industrialists and Entrepreneurs (UUIE) Anatolii Kinakh.

"The President stressed priority of the market schemes to administrative and forceful schemes in those spheres (agricultural industry and grain market)," reads the statement.

Besides that, Kuchma and Kinakh have discussed protection of Ukraine's interests in conditions of the European integration and Ukraine's preparations for joining the World Trade Organization.

The parties have also discussed conditions for attraction of intellectual potential of industrialists and entrepreneurs for improvement of the economy.

Kinakh informed President about preparations to the UUIE congress slated for September 4.

The Cabinet of Ministers in August demanded that the Ministry of Agricultural Policy and local authorities ensured reduction of the level of prices for production by August 30 to the level, on which they stayed on May 1.

In late July the Cabinet of Ministers permitted the state regional administrations to set prices for agricultural crops grain, by means of making relevant changes to the order of December 25, 1996, on plenary powers concerning pricing regulation.

KYIV.........Reports reaching Kyiv from many private farmers around Ukraine indicate there is a severe cash and credit shortage in the agricultural sector to purchase the seed, fertilizer, crop protection supplies and other essential inputs needed to plant the major fall crops in Ukraine.

The very low harvest in Ukraine this year due to extreme weather conditions plus the low percentage of government funds paid farmers for grain purchased from farmers this year by the government has caused the situation to be critical and may cause a significant reduction in the number of hectares planted this fall.

The severe cash shortage may also cause crops to be planted without proper preparation of the soil, without adequate fertilization and without the proper application of crop protection supplies. This will cause a major reduction in the size of the harvest in 2004.