UAC: Fuel purveyance for the autumn field works

“By and large, the situation concerning fuel supply for agrarians has been at least as good in 2009 as it was in 2008”, commented Yevgeniy Orel, Deputy Director General, Ukrainian Agrarian Confederation (UAC). It has been possible to avoid critical disruptions with the fuel supply. In the current year, according to the estimates of Ministry for Agrarian Policy, the estimated technological demand (ETD) for diesel fuel in the agrarian sector amounted to 1.5 million MT, gasoline 0.41 million MT. Of these amounts, the autumn field works required 530,000 and 139,000 MT respectively.

By early November, the agrarians totally purchased 427,000 MT of diesel fuel (81% of ETD) and 134,000 MT of gasoline (97%) for the autumn field works. As of now, the inventory stock of fuel amounts to 163,800 MT of diesel fuel (157% of ETD for November) and 46,200 MT of gasoline (167%).

Yevgeniy Orel observed that during 2009, the key issues for agrarians concerning the fuel supply have been mostly price-related ones. For example, earlier this year the agrarians faced the wholesale price soaring 34% for diesel (from UAH 4,800 to UAH 7,300 per MT) and 32% for gas (from UAH 5,900 to UAH 8,700 per MT). No seasonal deficits have occurred either Ukraine-wide or in the regional breakdown, thanks to the GOU orders obliging “UkrGazDobycha” to purvey fuel for the agrarian sector.

Also, Yevgeniy Orel believes that the agrarian sector “benefited” to a certain extent from the economic crisis that resulted in the decrease in the overall demand for fuel, thus freeing up fuel supplies for the agro-industrial complex, which proved to be nearly the only sector of Ukrainian economy that keeps going strong under the current dire economic situation. However, per Mr. Orel, the 3-fold reduction of credit resources available for the agrarian sector (from UAH 15 billion in 2008 to UAH 5 billion in 2009) tended to exert a from time to time pressure on the producers.

Generally, Mr. Orel concludes, a few lessons can be learned, of which it seems appropriate to single out the following: the well-arranged GOU efforts toward fuel purveyance can result in a stable performance of the agrarian sector; the credit facilities are to be open for agrarians, especially when it concerns purchasing of inputs, fuel in particular.

Analytical Department