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Ukraine to Export 4 Million Metric Tons of Grain to China in 2013

Date Posted: March 7, 2013

Kyiv, Ukraine—Having received USD 1.5 billion credit from China, Ukraine plans to export back about 4 million tons of grain in 2013 calendar year.

Such are the terms of USD 3 billion loan agreement between the Export-Import Bank of China and the State Food and Grain Corporation of Ukraine (SFGCU), reports korrespondent.net.

The contract between Ukraine and China, which was signed in July 2012, stipulated the supply of Ukrainian grain during the period of 15 years.

The volume of annual grain export to the Asian country will be determined by the supply plan with bringing the absolute delivery volume up to 6 million tons per calendar year, said Robert Brovdi, deputy chairman of the State Food and Grain Corporation of Ukraine.

The counterpart on the Asian side is China National Machinery Industry Complete Engineering Corporation (CMCEC).

Out of 4 million tons which are to be exported to China in 2013, 2 million tons will be purchased directly on Ukrainian market while the remaining 2 million tons will be procured through forward contracts, according to Brovdi.

This will also include the purchase of the 2012 harvest.

As reported earlier, Ukrainian parliament provided state guarantees for the $ 3 billion loan taken out by SFGCU from the Export-Import Bank of China, stipulating that the funds are to be used for projects in the field of agriculture.

The loan is set to increase trade volume, raise productivity, and stimulate equipment modernization in Ukrainian agricultural sector.

The money will finance Ukraine purchasing crop-protection agents, seeds, and equipment from China, land cultivation, as well as the construction of a plant for organic fertilizer processing and crop-protection agent production.

Aside from the loan, China perceives Ukrainian agriculture as an investment opportunity.

In 2013 alone, the volume of Chinese investment is set to reach USD 600 million, informed the executive director of the China-Ukraine International Engineering Cooperation Association Chi Kin Fung.

Just as in agriculture, China looks to increase its investments in infrastructure (railway between Kyiv and the country's largest airport Boryspil), energy (combined heat and power plant construction), coal industry, and car manufacturing.

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