VZCZCXRO7673
PP RUEHLN RUEHVK RUEHYG
DE RUEHKV #0807 1160237
ZNR UUUUU ZZH
P 250237Z APR 08
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 5435
INFO RUEHRC/USDA WASHDC
RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCNCIS/CIS COLLECTIVE

UNCLAS KYIV 000807 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
TREASURY FOR ALIKONIS 
DEPT PLS PASS USTR FOR CKLEIN/PBURKHEAD/EPORTER 
USDOC FOR 4231/ITA/OEENIS/NISD/CLUCYK 
USDA/FAS/OCRA FOR JFLEMINGS/DADAMS 
USDA/FAS/OGA FOR ROMEARA/JLAGOS 
USDA/FAS/PECAD FOR MLINDEMAN 
 
E.O. 12958: N/A 
TAGS: ETRD EAGR WTRO UP
SUBJECT: UKRAINIAN GOVT LIFTS QUOTAS ON GRAIN EXPORTS 
 
REFS: A) 2007 KYIV 2500 
 
      B) 2007 KYIV 1790 
 
Treat as Sensitive but Unclassified.  Not for Internet. 
 
¶1. (U) Summary: The GOU announced an end to grain export 
restrictions, long a sore spot for grain traders and WTO 
members, on April 23.  The GOU also announced a relaxation 
of restrictions on sunflower oil, although quotas on 
sunflower oil and seeds do remain in place.  The move was 
likely in part to satisfy trading partners ahead of 
Ukraine's accession to the WTO in May.  End Summary. 
 
¶2. (U) Prime Minister Yuliya Tymoshenko announced at a 
press conference on April 23 that her government had 
decided to lift the country's grain export restrictions, 
effective immediately.  (Note: The previous government 
first introduced restrictions on grain exports in September 
2006, with modifications to the quotas subsequently put 
into place (reftels).  End note.)  Tymoshenko said that 
expectations of a robust grain harvest had made the 
decision possible. 
 
¶3. (U) The GOU also announced its decision to relax 
restrictions on exports of sunflower oil, increasing the 
quota from 300,000 tons to 500,000 until July 1.  Quotas on 
sunflower seeds remain at 1,000 tons, however. 
 
Comment: Just in Time for WTO Accession 
--------------------------------------- 
 
¶4. (SBU) The GOU decision came just weeks before Ukraine's 
scheduled entry into the WTO on May 16.  The GOU had 
repeatedly promised WTO members that Ukraine would 
eliminate the grain export restrictions by the time of 
accession, and lead WTO negotiator Valeriy Pyatnytskiy had 
pushed hard within the GOU for adherence to this 
commitment.  (Note: Sunflower oil/seed restrictions came 
into effect only after accession negotiations had 
concluded.  End note.)  There was probably also pressure as 
much of Ukraine's grain storage is full and farmers would 
face huge problems if there was no storage available for 
this year's crop.  Skyrocketing world food prices, 
coinciding with Ukraine's own inflation problems, will 
continue to put pressure on the GOU to do something about 
food prices, however.  Because export restrictions are 
easier to introduce than structural reforms, it is quite 
possible that the GOU could seek to reintroduce grain 
export quotas sometime in the future, although there is no 
talk of this for the moment.  At least by that time the GOU 
will have to answer to the WTO for such action.  (Note: 
Post will report septel on the broader effects of rising 
world food prices on Ukraine.  End note.)  End comment. 
 
TAYLOR