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Friday, March 16, 2018

The EU came up with a way to ban Ukrainian milk

The European Union is actually condemned to slaughter another sector of the Ukrainian economy – milk. Suddenly it became clear that, despite political support and economic Association, Ukrainian milk is prohibited to supply to the EU market. And the reason for that, it seems, indirectly became the Russian restrictions for farmers from Europe.

EU canceled purchases of Ukrainian dairy products due to high content of antibiotics, said the General Director of the Ukrainian Association of trade networks suppliers Oleksiy Doroshenko.

Ukrainian producers are hoping “at random” or friendly position of the European Union and continued to feed the cows antibiotics. “It didn’t work”

According to him, the production is no Ukrainian manufacturer does not comply with European quality standards, therefore cannot be sold on the European market. Even the supply to Bulgaria in April this year were rejected by the importing country, reports TASS.

“Everyone knows that Ukraine is diluted milk, but that’s not the worst. Much worse than what we are “force-fed” animals with antibiotics. Milk these antibiotics,” – says Alexey Doroshenko.

However, he says that checking out all of the milk on the quality characteristics is impossible. The fact that the country has few large dairy agricultural factories and dairies, and buy mainly raw materials from small farmers and households. In the villages people still go “collectors of milk, which for a penny buy back on display in village courtyards cans of milk. “A bucket or a barrel of milk could not be verified, because of which even a small amount of milk of poor quality can ruin a big party,” said Dmitry Lukashov from IFC Markets. However, the presence of difficulties is not a reason not to improve the system of inspections and quality standards. At the state level almost no funds allocated to the inspection of dairy products, says Lukashov.

Of course, it is possible that the European Union has used this whole situation as an excuse to help private producers of dairy products, which were on the verge of ruin. After the closure of the Russian market for European farmers fell on hard times, and even on the world commodity market, pushing the seasonal factor, the prices fall. For example, grain prices fell 5.6%, oilseeds – by 2.8%, milk – by 3.2%.

Increased supply and lower prices for products in the context of the loss of the Russian market may lead to a crisis of overproduction in Europe and to put local farmers on the brink of bankruptcy. At the same preferential conditions of export of Ukrainian goods, initially cheaper, can only aggravate the situation. Ukraine, previously sending the lion’s share of agricultural production in Russia, now trying to transfer the whole surplus on Europe. However, it is unprofitable first of all to the European Union”, – says the newspaper VIEW CEO of the export company Transitplus International Dmitry Portnyagin.

Exactly such situation is observed on the milk market. Europe has long been faced with the problem of overproduction of milk, which led to a record drop in its cost to 27 cents per pound of raw sugar, indicates Portnyagin. Ukrainian milk only collapsing prices in Europe even more.

“Despite the fact that the European countries honor the rules of the WTO, protectionism in this case is appropriate. And the imposition of restrictions on the supply of Ukrainian milk in connection with the discovery in it of the high content of hormones can be a very convenient pretext,” does not exclude Dmitry Portnyagin.

In any case, in the fall of its exports, Ukraine needs to blame not only Brussels (small quota) and Moscow (for breach of the free trade zone of CIS), but also herself. Of course, the EU dissembled a bit, when he promised to open its market for Ukrainian goods. Quotas for duty-free deliveries of Ukrainian products Brussels has allocated a small part of them was used in the first two months of the year, the other to the middle of the year. But it’s not just the quotas. Milk also has quotas, but that doesn’t matter when none of the Ukrainian milkman is not licensed to export their products to the EU due to non-compliance with European standards.

The Ukraine was simply not ready to export to Europe. After Kiev was aware of the need to bring the goods into conformity with European standards long before the establishment of a free trade zone. In 2012-2013 had estimated that it would require from tens to hundreds of billions of hryvnia.

Yes, and the problem of poor quality milk in Ukraine is not opening in 2016, it is known to all and for a long time. In 2014 Russia has refused Ukrainian milk because of the presence of prohibited antibiotics – tetracycline. The question then was widely discussed in Ukraine at the highest level, but somehow no specific findings were not made,” says Dmitry Lukashov from IFC Markets.

We all know that the EU has high standards for imported goods – whether it be dairy products, meat, seafood, fish or grains. However, this does not prevent either Russia or many other countries to supply its products to the EU. Russia, for example, is one of the largest suppliers of wheat, of grain and oil crops in the countries of the Old world.

What prevented Ukrainian refineries prepare to enter a new market? “We can only guess based on what considerations the Ukrainian producers expecting to increase exports to the EU, oriented in the production of European quality standards. In fact, Ukraine remains one of the largest agro-producers, and it is not only farm, but also laboratories for quality control of products targeted for export. And the EU standards are not closed and if desired, it is possible to see,” says Dmitry Portnyagin.

“Probably, the Ukrainian producers were counting on “maybe” or friendly position of the European Union and continued to feed the cows antibiotics. As we are now seeing, “it didn’t work” – does not preclude Lukashov.

However, the lack of investment also played a role. With the advent of palamidessi the authorities of the lending market in Ukraine imploded, foreign investors and gone. Where did the Ukrainian farmers or dairies there is extra money, especially after they were deprived of a major market – Russia – before the EU opened its doors? Brussels since the beginning of this year approved the export of Ukrainian milk and only for 10 companies. Apparently, then antibiotics in the Ukrainian milk European regulators not found, but to keep the quality standards of Ukrainian suppliers obviously are unable.

Including why Ukraine trades with the EU under the free trade zone with the EU in much smaller volumes than in 2013, to European integration and agreements.

At the same time the Ukraine, but the export of labor, there was actually one important export product is agricultural products. But the share of Europe accounts for only a third of Ukrainian agricultural exports, while Asian countries buy about 45% and 15% in Africa, says Dmitry Lukashov. It turns out that Ukraine has exchanged Russia in Europe and Asia and Africa. If not a third world country, the Ukrainian foreign trade would collapse completely.

According to the results of the first half of 2016, Russia remains the main trading partner of Ukraine. The export to the EU fell by more than 22% compared to the first half of 2013. The Association agreement of Ukraine with the EU did, in fact, gave to the Ukrainian state.

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