Russian starch duty likely to cause lower production in Ukraine

Eurofood, August 2, 2001

The special three-year import duty Russia has imposed on corn and potato starch will lead to a drop in production in Ukraine. The director of the trading house Krakhmaloprodukt, Dmitry Pukhovoi, has told Interfax that the duty will "practically close down exports of Ukrainian starch, in the autumn and winter there will be none."

In addition to Russia, Pukhovoi noted, Ukrainian starch is exported to Belarus, Central Asia, and an insignificant amount to the countries of the Near East.

ALREADY SUFFICIENTLY SUPPLIED

However, boosting supplies to those markets is not realistic, since they are already sufficiently supplied, he said. "The main volume of Ukrainian starch is destined for Russian consumers," he pointed out.

OVER 65% EXPORTED TO RUSSIA

Last year, over 65% of the 14 000 tonnes plus produced in Ukraine exported was shipped to Russia.

Pukhovoi did not rule out the possibility of the duty's forcing the closure of the Dneprovsky Starch Combine, the country's main producer of corn starch.

Krakhmaloprodukt is the main suppliers of raw material to the Combine. He also expressed concern over the possibly "expansion of Russian-made starch on the Ukrainian market."

50 000 TONNES CAPACITY

Ukraine has fifteen starch-making plants, the combined production capacity of which is more than 50 000t of product per year.