Банкеръ Weekly

Briefs

THE STATE WILL BE PROTECTING THE GRAIN MARKET

The Government has decided that no export fee would be charged on milling wheat as of the autumn. However, non-tariff payments - fees for permissions issued by the veterinary and sanitary control authorities, port dues, and the fees charged by the National Grain Service in compliance with the Amendments to the Act on Trade and Storage of Grain (passed in May, 2003) - will be raised. According to traders from Intercommerce company, the fees paid to the State for export of grain currently amount to some 17% of the commodity's value and are expected to reach 22-25 per cent if the tariffs are hiked. This will render exports unprofitable to a large extent and will guarantee supply on the domestic market till the new crop. In fact, it became clear that phyto-sanitary control when wheat for processing and consumption is exported will cost BGN20/ton and BGN15/ton will be charged for a document for conformity when grain is exported. BGN30/ton will be paid for a quality certificate in English, and BGN15/ton - for a protocol from the testing of grain and fodders. If we add the port dues it would turn out that traders shall have to pay to the State about BGN50-55/ton of exported grain. Another measure, aimed to limit export, is connected with increasing control on the exporters. All along the chain - from the purchase of grain to its loading on a vessel - there will be abundant number of officials from the Ministry of Agriculture and its specialized national services, as well as tax authorities and traffic police. The documents of transport vehicles, the genuineness of data entered in the export contracts, and the loaded quantities, will be strictly controlled. This will limit the possibilities for sumbitting false information about the quantity, quality and price of the exported commodities.All projected measures will be in force till the end of the autumn sowing when the Agriculture Ministry will be clear about what quantities could be expected next year and how much grain there is in warehouses, the Minister of Agriculture Mehmed Dikme specified. The State will also intervene on the domestic market in order to restrict the raise of grain prices. About 150,000 tons from the Grain Stores Fund and some 56,000 tons from the State Reserve are available for the fulfillment of that measure. Thus, each month from September onwards, the State will be able to offer 25,000-30,000 tons of grain on the market. In the words of Mr. Dikme, that quantity would guarantee the country's bread supply for at least four months.When reporting on the two years during which he has been heading the Agriculture Ministry, Mr. Dikme underlined that he won't allow excessive increase of wheat and bread prices or export of grain at lower prices, which would afterwards be imported into Bulgaria and sold 30-40% higher. According to the Agriculture Minister, the price of grain in our country won't exceed BGN180-190/ton, as presently there are offers for import of good-quality grain at USD105/ton, to be delivered at the Varna port. If it becomes necessary, we'll be selling Bulgarian grain to the middlemen at BGN200/ton and importing the commodity at BGN180/ton, Mr. Dikme added.

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