On trading in Ukraine
Ukraine is an Eastern European nation bordering the Black Sea that shares land boundaries with Belarus, Hungary, Moldova, Poland, Romania, Russia, and Slovakia. Its economy is characterized by a large trade deficit driven by the import of energy resources, mainly from Russia, and high value-added goods. Exports meanwhile are comprised largely of metals and metal goods, agriculture, and other low value products destined for a small group of CIS and European markets. Ukraine has been eager to expand its market access as a WTO member and a participant in the CIS free trade agreement. Despite significant potential for export growth, Ukrainian competitiveness is still hindered by low productivity, market and product concentration, limited financialaccess, deteriorating physical infrastructure, and cumbersome regulations and customs procedures.
Ukrainian agriculture relies heavily on grains such as wheat and barley production that is susceptible to international trade problems. This makes the majority of farmers vulnerable to international price fluctuations in grains, and it also creates a buyer’s market as farmers retain little to no ability to negotiate prices. Wheat itself is planted in the fall and harvested in the spring but is subject to losses from frost that vary wildly from year to year.
Many farmers lack onsite storage facilities and because of this tend to sell their harvested grains right when they are harvested and when prices are lowest. When farmers decide to grow their business with the help of Impex Import & Export LTD provided products they also have the opportunity to purchase cold-storage units to safely house their delicate grapes and berries until they are prepared to sell them.
Farmers have issues receiving credit due to high interest rates and collateral demands. Commercial interest rates are effectively 25-30% and are offered on short term repayment schedules. With little trust or business occurring with banks, farmers are left with little developmental opportunities in growing their businesses. Impex Import & Export LTD is a leader in financing agricultural products in southern Ukraine and we understand the unique needs of farmers better than any bank ever could. Our entire focus is to provide the best possible output for the farmer.