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10ВЛИЯНИЕ ЭКСПОРТНОЙ ПОШЛИНЫ НА МАСЛОЖИРОВУЮ ПРОМЫШЛЕННОСТЬ УКРАИНЫ
Бескупская Е.В.
Винницкий национальный аграрный университет,
Украина
EXPORT DUTY INFLUENCE ON OIL AND FAT INDUSTRY
OF UKRAINE
Beskupska O. V.
Vinnytsia National Agrarian University,
Ukraine
АННОТАЦИЯ
В статье рассматривается вопрос экспортной пошлины для предприятий масложировой промышленности, в условиях массового экспорта сырья из страны. В статье рассмотрено нынешнее состояние масло-жировой промышленности Украины. Проанализированы проблемы и возможные пути развития данной отрасли. Выделены основные цели и задачи сохранения экспортной пошлины на семена подсолнечника и внедрение пошлины на семена рапса и сои.
ABSTRACT
The article deals with the issue of export duty for the companies of the oil and fat industry of Ukraine in terms of mass export of raw material abroad. The current state of oil and fat industry of Ukraine is investigated in the article. Problems and possible ways of future development of the industry are analyzed. The basic goals and objectives of export duty preservation for sunflower seeds and implementation of export duty on rape and soya seeds are singled out.
Ключевые слова: масложировая промышленность, экспортная пошлина, экспорт, возмещение НДС
Keywords: oil and fat industry, export duty, export, VAT refund
Problem statement. Oil and fat industry is one of the leading branches of food industry of Ukraine. It is a brilliant example of how the economy benefits from transition from the raw material type, when a country becomes a raw material appendage for developed countries to the development of a competitive product with high added value within the country. Using the example of oil and fat industry we can see that introduction of export duty on sunflower seeds in 1993 provided not only its revival but also transformation into a powerful agricultural production sector, where a balance of economic interests of a country, agricultural and processing industries has been established.
This all proves the necessity of the existing export duty preservation and implementation of export duties on other oilseeds like rape and soya. Using export duty for national products is one of the ways of export restrictions. Export duty can serve several functions: protectionist, fiscal, regulatory, political. At the same time, export duty as a means of export and tariff policy is quite controversial (it is used only by developing countries and countries with economies in transaction).
Ukraine uses export duty for a wide range of products, not always taking into account the possible negative factors of its influence. Considering the importance of export potential development, the study of the export duty effectiveness is very important. The issue is really urgent as the situation on the market of oilseeds, rapid export of raw materials and underloading of the plants needs further investigation.
Purpose of the article is to study the influence of introduction of export duty for rape and soya beans in
the context of rapid export of these cultures from the country and underloading of plants.
Results of the study. From 1996 the main purpose of export duty implementation is to regulate the economy. It was caused by the need of blocking the export flow from Ukraine of raw materials, which were important for the national economy. The main argument to do this was to load national enterprises. Export duty was introduced for such commodities: scrap metal, livestock, oilseeds and other [3].
Oilseeds are most profitable among other agricultural crops: sunflower - 61,9%, soya - 51,8%, rape -45%. For the last twenty years oil and fat industry created 100 thousand working places, total amount of investments, made in the sector development exceeds 3 billion dollars, 16 new terminals have been created in ports, production of sunflower oil increased 13,3 times, export - 28,4 times.
Oil and fat sector is now in state of complacency as sunflower and soya yields are increasing, investments in capacity building are growing, and production is also showing a positive tendency. In these circumstances tracking new global trends and new market tendencies are almost third-rate tasks.
However, ignoring these tasks can lead to negative consequences. We can take as an example the history of sugar sector of Ukraine. In 1990 Ukraine was leader in production of beet sugar and this branch provided 15% of budget revenues. Nowadays the amount of sugar plants has decreased from 200 almost five times. This was caused first of all because new factors were
not taken into account. The first factor was the possibility of losing the market of former USSR countries. The second one was growing competition on the beet sugar market. And the third factor which destroyed the industry was the fact that the role of cane sugar increased drastically on the world market, which was much cheaper than beet one. This clearly resembles the
If we look at the graph below, we can see that 45% of sunflower export is made to India and China. If we add countries of European Union, we get 75% of export for three markets. Undoubtedly Ukraine has made a serious progress on the Chinese market, but other manufacturers are increasing production and export, gradually replacing Ukrainian oil.
competition between sunflower and cheap palm oil [4].
Ukraine: geagraphy of sunflower export in 2016-2017
Great Britain; 105,3; 2%
The process of sunflower oil price formation is influenced by production of the cheapest oil - palm oil. Its production will increase to 20-25 million tones to 2025, and share of other oils on the global scale will decrease. Prices for all the vegetable oil will tend to the cheapest and mass product offered on the market. We can already see a steady trend of price convergence between palm and sunflower oils.
The fact that export duty is representing a strong measure in preservation Ukrainian leadership in oil and fat production and export in the world cannot be disputed. In 2016 a bill "On the rates of export (export) duties on seeds of certain types of oilseeds" was proposed, which consisted in cancelling a 10% export duty for sunflower. However, long negotiations lead to
be in case of duty cancellation? It will first lead to sunflower seed deficit on the local market, loss of working places, destabilization of price situation on sunflower oil, loss of Ukraine's position on the world market of sunflower oil and investor confidence, who invested in Ukrainian oil and fat industry.
On the table below, the change of export duty rates for the last 19 years are shown [2]. Unfortunately, export rates for rape and soya is not charged. Rates for sunflower, linen and camelina seeds decreased more than twice, which is partly a positive tendency, as duty for linen seeds is proven not to be effective; producers do not want to process linen seeds because of small amounts of production, and enterprises do not increase crops due to small domestic demand and export duties.
preservation of the duty. What would the consequences
Law of Ukraine of 10.09.1999 № 1033-XIV "On the rates of export (export) duties on seeds of certain types of oilseeds"
Product name Export duty rate, as a percentage of the customs value of the goods.
Year 1999 Year 2018
Linen seeds 23 10
Sunflower seeds 23 10
Camelina seeds 23 10
Plants in Ukraine have the capacity to process 18 is only 70%. Ukraine produces 4 million of soya and 2 million tones of seeds a year, sunflower production is million of rape a year and these cultures are massively 13 million tones, which means that production capacity exported.
According to CEO of "Ukroliyaprom" association Stepan Kapshuk, 4.5 million tones of soya and rape which are exported would be enough for the plants to proceed for four months. This would help increase added value of the products, load the plants and increase profit. Kapshuk proposed to introduce export duty or cancel VAT refunds on export [5]. Moreover, he stated that there is a high competition for sunflower seeds because of insufficient load of the enterprises. It causes high prices for the seeds, while export price for the oil is constantly declining.
Production of rape seeds is decreasing for the second year: in 2013 2.3 million tones of rape seeds were collected, 2.2 million tones in 2014, 2.8 - in 2015 and 1.1 - in 2016. Accordingly, export is decreasing too. From July to November of 2015-2016 marketing year Ukraine exported 1.28 millions tones of rape seeds, mainly to the EU countries for biodiesel production. However, taking into account the tendencies on oil market, biofuels are not that profitable.
Growth of soya and rape seeds processing will help the industry attract 1 billion dollars of investments and create additional 1500 working places. Growth of revenues to the state budget will amount in 11 billion hryvnias (almost 400 million dollars).
Ukraine has to protect its market from external expansion, and also to actively search for consumers of the products in accordance with market conditions and the market of long-term partnership. Implementing the export duty, main purposes are to turn Ukraine from seeds exporter into exporter of final product. In case of sunflower this goal was reached: production of sunflower oil, meal, margarine, mayonnaise and soap increased which had a positive influence on filling the state budget.
However, companies have to take into consideration that deep processing of oilseeds requires strict temperature regimes, conditions and terms of storage. Thus, difficulties are not so much in marketing but in logistics. Logistic system in Ukraine is underdeveloped and needs a lot of investments in order to work properly. That is why production of such products as mayonnaise and margarine is now made mainly on local markets and foreign trade is rather limited.
CONCLUSION. Ukraine has a serious potential of international specialization in agro-industrial complex. It has more than 25% of worlds' fertile black soils, favorable climate conditions. Completion of the land reform, technical re-equipment will help increasing agricultural production. Large enterprises of the food industry are gradually modernizing their equipment and producing goods which meet world quality standards.
Export duty has both pros and cons. The first ones include reorientation of export from raw materials to products with added value, contribute to the development of the processing industry, increasing investment in oil production and revenues to the state budget, improving access to credit resources. Among negative factors are: the decline of domestic prices for sunflower seeds, redistribution of profits from seed producers to oil producers, emergence of additional schemes with customer's raw materials in order to avoid paying duties.
The main condition for further sustainable development of oil and fat industry of Ukraine is preservation of export duty for sunflower seeds and creation of conditions for the maximum processing of rape and soya seeds on Ukrainian enterprises.
References
1. Stetsenko J.V. State regulation of export in Ukraine. Retrieved from: http://www.nbuv. gov.ua/por-tal/Soc Gum/Evkpi/2010/48.pdf.
2. Information on the rates of export (export) duties established by legislative acts of Ukraine. Retrived from: http://sfs. gov.ua/baneryi/mitne-oform-lennya/subektam-zed/stavki-vviznogo-ta-viviznogo-mita/vivizne-mito/vvizne-mito/
3. On the Customs Tariff of Ukraine. Retrieved from: http://zakon0.rada.gov.ua/laws/show/2371 -14?lang=en
4. Sergey Feofilov "Sunflower oil on the global market: remembering the bitter fate of Ukrainian sugar", October 12, 2017. Retrieved from: https://lati-fundist.com/blog/read/1931-podsolnechnoe-maslo-na-globalnom-rynke-pomnya-gorkuyu-sudbu-ukrainskogo-sahara
