- Rush Hour Truck Ban Starts in Kyiv
- Frozen Bridges to Be Completed
- EU’s Used Cars Fill Streets
- Ukreximbank Joins the Bond Rush
- Boryspil Up, Sikorsky Down
Since Friday trucks are not allowed to enter the capital on the M-06 highway from Zhytomyr during weekday rush hours: from 7:00 to 10:00, and from 17:00 to 20:00. Following the practice of many large European cities, the rush-hour truck ban will spread to all highways leading into Kyiv. “During rush hours — evening and morning — we will restrict entry,” Yuriy Zozulya, head of Kyiv’s Patrol Police, tells the Center for Transportation Technologies. “Trucks will park at the entrances to Kyiv…As soon as commuters arrive at work, we will start trucks.” From all directions, up to 50,000 trucks drive into Kyiv daily.
Pivdennyi, or Southern Bridge bears the brunt of the load. Designed in the late Soviet era to carry 20,000 cars a day, this six-lane, 1.2 km bridge now averages 100,000 cars a day.
Highway construction companies from China, France, Portugal, and Switzerland are asking the Infrastructure Ministry for details on highways that will put up for concession, Minister Krikliy tells UATV. A list prepared by the Ministry and the World Bank includes a ‘Great Ring Road’ around Kyiv and a 75 km highway between Kyiv’s existing Ring Road and Bila Tserkva.
With road traffic booming, two bridges, long symbols of economic paralysis, are to be completed by 2022.
In Zaporizhia, Prime Minister Honcharuk stood on a half-completed bridge over the Dnipro Thursday and vowed to complete “in 2-3 years,” a project that started in 2004. Last month, Ukravtodor, the state highway agency, signed an agreement with China Road and Bridge Corporation to finish the bridge. The cost for completion is estimated at $500 million.
In Kyiv, Mayor Klitschko promises that the 7.5 km Podilsko-Voskresensky Bridge will open for cars in 2021. Under construction since 1993, the landmark bridge is designed to carry 60,000 vehicles a day. In recent years, it has won worldwide fame as a film set for music videos.
Ukrainians increasingly drive used imported cars, Oleksander Kozis, chairman of UkrAVTO Corporation, told the Ukrainian Automotive Forum Thursday. In 2008, about half of the 685,000 new vehicle registrations were new imports and half were made in Ukraine. In 2018, new imports and made in Ukraine vehicles were 96,300. Imported used cars totaled 156,800. During the first 10 months of this year imported used cars totaled 349,000. The top imported brands are Volkswagen, Skoda, Ford, Renault, and Opel.
So far this year, Ukrainian factories have made 7,000 vehicles, large buses, and trucks. Aivaras Abromavičius, Director General of UkrOboronProm, said the collapse of Ukraine’s auto manufacturing industry is “shocking.”
Poland’s refusal to grant Ukraine sufficient trucking permits “is economic genocide,” Ukraine’s new trade representative, Taras Kachka, told a Kyiv conference, “Trade Wars: The Art of Defense.” Ukraine needs 230,000 permits for 2020, but Poland will only grant 160,000. “This is stifling our trade with the European Union,” Kachka said.
To speed trade and tourism with the EU, Ukraine’s 2020 budget includes $20 million to modernize and expand 16 customs checkpoints on Ukraine’s western borders. Work on three checkpoints – Krakovets, Rava-Ruska, and Shehyni – will be carried out using a loan from Poland, Prime Minister Honcharuk told the Cabinet on Wednesday. Ukraine has borders with four EU nations – Romania, Hungary, Slovakia and Poland.
State-owned Ukreximbank is placing 10-year Eurobonds for $100 million at 9.95% per annum, report UNIAN, and Interfax-Ukraine. JPMorgan and Morgan Stanley are organizing the issue. A roadshow took place this week in London, Frankfurt, and Zurich. With assets of $8.8 billion, Ukreximbank is Ukraine’s third-largest bank, after PrivatBank and Oschadbank.
Foreign investment in hryvnia denominated bonds hit the equivalent of $4 billion, boosted by $43 million of purchases at Tuesday’s weekly auction, reports the National Bank of Ukraine website. Since the start of the year, foreign investment in Ukraine’s government bonds has increased 16-fold, boosted in part by the May trading link with Clearstream. Foreigners now own 12.5% of Ukrainian internal government securities. If bonds in the portfolio of the National Bank are removed, the foreign participation in the market rises to about 40%.
The EBRD has raised its 2019 Ukraine GDP growth figure to 3.3%. This is three times the European Commission forecast for 2019 Eurozone growth – 1.1%. For next year, the EBRD predicts the growth of 3.5%, the same as neighboring Poland.
Motor Sich is canceling most of its flights from Kyiv to Odesa and from Kyiv to Lviv. The airline is focusing on flights from its Zaporozhia base. From that city, Motor Sich flies to Kyiv Sikorsky twice a day and to Minsk four times a week.
UIA continues to pare money-losing flights. Starting Nov. 16, Kyiv Boryspil-Bangkok will be reduced to three times a week, and then completely ended March 29. On Jan. 14, UIA will stop flying to Krakow, a newly competitive route. In the last year, Ryanair started flying from Boryspil to Krakow and Wizz Air started flying from Kyiv Sikorsky to Krakow.
Through October, Kyiv Boryspil, Ukraine’s largest airport, handled 13 million passengers – 22% more passengers y-o-y. Passengers on charter flights were up 26%, to 3.2 million. Transfer passengers, a specialty for the UIA hub, were down 3% through October, to 2.8 million. In October, transfer passengers were down 15%. Overall, transfer passengers accounted for 22% of the people using Boryspil.
Kyiv Sikorsky bucked a national trend, seeing its passengers drop by 8% through October, to 2.2 million. With Boryspil opening Terminal F as its low-cost terminal last spring, Sikorsky lost SkyUp, Pegasus, and Yanair. In addition, Sikorsky’s lone runway was closed for 10 days in September for scheduled repairs. With 98% of Sikorsky passengers flying international, Kyiv’s Right Bank airport is largely the preserve of Wizz Air and Ernest Airlines.
- DTEK Places Ukraine’s First ‘Green Eurobond’
- Fines for Air, Water Pollution To Increase 4X
- New EU € for Kyiv-Odesa Highway
- Used Car Imports up 4X
- Sugar Sours
DTEK Renewables is placing Ukraine’s first ‘Green Eurobonds’ – €325 million worth of 5-year bonds at a rate of 8.5% per annum. The placement comes after a roadshow with meetings with more than 50 investors in the US, UK, and EU. Joint organizers were Raiffeisen Bank International and Renaissance Capital. The co-organizer was Ukrgasbank. Fitch assigns the bonds a rating of ‘B’, and Standard & Poor’s assigns “B-“.
The bonds are to help DTEK Renewables, Ukraine’s largest investor in renewable energy, move ahead with almost 1 gigawatt of new projects. In the Odesa region, DTEK is preparing to build what would be Europe’s second-largest wind farm – Tylihul, with a capacity of 565 MW. Next year, DTEK plans to start building three solar parks in the Dnipropetrovsk region with a total capacity of 390 MW – Pavlogradska, Troitska, and Vasilkovska. Today, DTEK accounts for about half of Ukraine’s installed wind power capacity and about 15% of its solar capacity.
DTEK CEO Maxim Timchenko said Wednesday: “As a company, we have created the expertise that allows us to implement large-scale and ambitious projects, and which demonstrate to international investors the high professionalism of Ukrainian companies. The issuance of these Green Eurobonds represents a major milestone for the Ukrainian energy sector.”
An American investor in solar projects predicted to the UBN: “First issuer, but not last issue. DTEK is very serious about their renewable business.”
After Ukrenergo failed to take electricity from DTEK’s expanded wind power plants on Monday night, Andriy Gerus, head of the Rada’s Energy Committee, agreed to meet with the heads of DTEK and Ukrenergo, the state power distribution company. Alexei Kucherenko, an opposition committee member, charged that Gerus is not looking for a solution to growing renewable capacity. “Our Committee is called the ‘Committee on Energy and Housing and Public Utilities,’” said Kucherenko. “It is not called the ‘Committee to Combat DTEK.’”
Fines for air and water pollution would increase four-fold under a bill submitted to the Rada by President Zelenskiy’s Servant of the People party. Sponsors estimate such an increase would generate $560 million in revenue for the state. Zelenskiy grew up in Kriviy Rih, a city with an air pollution problem from the ArcelorMittal steelworks.
The Cabinet of Ministers authorized Wednesday the borrowing of €450 million from the European Investment Bank to build a northern bypass highway around Lviv and to rebuild the southern two-thirds of the Kyiv-Odesa M-05 highway, starting in Cherkasy Oblast. This soft loan represents that first 10% of €4.5 billion in projects sketched out last January by the European Commission and the World Bank. Stretching through the 2020s, the plan calls for investing in 39 Ukrainian infrastructure projects to fully integrate Ukraine in the Trans-European Transport Network or TEN-T.
Through October, Ukraine has registered four times as many used imported cars, 349,000, than during the first 10 months of last year, reports Ukravtoprom, the auto industry association. Last year, Ukrainians imported 116,800 used cars, double the level of 2017.
Starting next month, Belarus will have 1,787 km of toll highways, while Ukraine will have none, reports the Center for Transportation Strategies. Following last month’s signing of Ukraine’s Concessions Law, the Infrastructure Ministry is reviewing plans for tenders in 2020 for five possible toll roads: Lviv-Stry, Lviv-Ternopil, Lviv-Krakovets, Kyiv-Bila Tserkva, and big Ring Road around Kyiv.
An alternative access road to Odesa seaport will be a toll road, Raivis Veckagans, head of the Ukrainian Sea Ports Authority, writes in UNIAN. He said: “Free cheese only happens in a mousetrap.” Currently, a private company, Euroterminal, controls truck access to the port. Last summer, President Zelenskiy asked Odesa Mayor Gennadiy Trukhanov to find an alternative route. Last week, the Odesa City Council refused to approve the use of 20 hectares to build the road, across the edge of a sewage treatment plant. As measured by cargo, Odesa is falling behind its major Black Sea rivals – Pivdenii (Yuzhne), Mykolaiv and Chornomorsk.
Revenue from exports of oilseeds is up by 23% y-o-y through September, to $1.6 billion, reports the Institute of Agricultural Economics. Top seeds are canola, soy, and sunflower. During the same period, exports of sunflower oil were up by 3%, to $3 billion. Popular as cooking oil, Ukraine’s sunflower oil goes to: India – 31%; China – 15%; the Netherlands – 10%; Spain – 6%; Iraq – 5.9%; Italy -5.8%; and Poland -3.6%.
With the sugar milling season nearing an end, Ukraine’s sugar mills have produced nearly 1 million tons of sugar. About six tons of sugar beets are processed to make one ton of sugar. Hit by low prices, reduced plantings, and heavy rains, Ukraine’s sugar production may only reach 1.1 million tons this year, 35% below last year’s level. Experts predict that prices will start to recover during the current marketing season.
President Zelensky has appointed Andrew Mac, Washington partner for the Ukrainian law firm Asters, as his ‘non-staff’ adviser. Mac, a Ukrainian and Russian speaker with almost a decade of Washington experience, joined Asters one year ago with the merger of EPAM with Asters.
The government is cutting 1,700 jobs from regional units of the State Statistics Service and 18,499 jobs from ‘district state administrations,’ reports Dmitro Dubilet, Minister of the Cabinet of Ministers. In another effort to cut the state, 281 government buildings will be vacated and then leased or privatized.
- Trump Advisor Seeks to Block China and Buy Motor Sich
- Antonov, Airbus Helicopters Make Sales
- Bond Sale Bonanzas: Demand for Naftogaz 3 Times Bigger Than Supply, Demand for 4-year Treasuries 5 Times Supply
Erik Prince, the former owner of Blackwater security and adviser to President Trump, is in discussions to purchase Motor Sich to block China from winning control of the helicopter engine manufacturer, reports The Wall Street Journal, citing unnamed American officials. Two weeks ago, Prince visited the Motor Sich main plant in Zaporizhia, the latest of at least nine trips to Ukraine in the last five years, the Journal reports.
In late August, then-national security adviser John Bolton complained in Kyiv about the impending sale. In late September, acting US Ambassador Bill Taylor, and Donald Winter, Trump’s advisor to UkrOboronProm, visited the Zaporizhia plant. On Oct. 3, an inter-Agency meeting was held in Arlington, Virginia with US defense contractors to discuss defense sector opportunities in Ukraine, including Motor Sich, the Journal reports from Kyiv.
Interfax-Ukraine reports the Chinese purchase of Motor Sich was agreed on June 19, pending approval by the Antimonopoly Committee of Ukraine. For the first nine months of this year, Motor Sich lost $22 million on revenues of $255 million.
France’s Airbus Helicopters will set up a pilot training and maintenance center next month in Kremenchuk, reports Ukraine’s Internal Affairs Ministry. The center, coupled with a new representative office in Kyiv, is part of an agreement signed last year for the ministry to buy 55 helicopters. Airbus has already supplied at least four helicopters and 10 more are to be delivered next year.
The Internal Affairs Ministry plans to buy 13 Ukrainian-made An-178 airplanes for use by the National Guard and the State Emergencies Service. “These are the first aircraft with Ukrainian and European parts, but without Russian components,” Minister Arsen Avakov said of Antonov’s new short-range, medium-airlift military transports.
UIA would buy Ukrainian-made regional jets, if they were mass-produced, Aron Mayberg, head of the supervisory board and co-owner of the airline, tells Mind.ua. Asked about Antonov’s planned production line, he said: “We really need a mid-range aircraft with a capacity of 70–100 seats, If Ukraine made such a successful aircraft, we would buy it.”
In response to a Wall Street Journal article from Washington saying that IMF talks with Ukraine are ‘stalled’ over PrivatBank, Prime Minister Oleksiy Honcharuk told reporters Tuesday: “Negotiations and work are ongoing. We are on the phone daily with our [IMF] colleagues.” At the same briefing, Finance Minister Oksana Markarova, a veteran of earlier talks with the IMF, said: “It’s moving very constructively, faster, for example, than it was last year, faster than it was three years ago when we discussed the program.”
Concorde Capital’s Alexander Paraschiy writes: “The issue of Privatbank is definitely important, but we expect that this time it won’t be critical for signing a new IMF program, as soon as Kyiv continues to assure the public it is doing all its best to resolve the issue to the government’s benefit. All in all, we expect the new IMF program will be agreed upon by the end of 2019 and Ukraine will be able to get the initial tranche in late 2019 or early 2020.”
Naftogaz is placing $500 million worth of 7-year Eurobonds at 7.625%, 127 basis points above the sovereign curve. This November placement is 23 basis points lower than the state energy company’s two placements in July. Demand outstripped supply 2.9 times, reports the company. The sole organizer of the placement is Citi. Fitch has assigned Naftogaz a long-term credit rating of B with a positive outlook.
Concorde Capital’s Alexander Paraschiy writes: “The deal is a real success. Even with the placement of the new Eurobond, Naftogaz’s leverage remains solid: its total debt to LTM EBITDA is just 0.8x, based on its latest financial results and the current exchange rate. We continue to believe NAFTO Eurobonds bear the same risk as sovereign paper.”
Strong demand allowed the Finance Ministry to keep squeezing yields in its weekly Tuesday auction of hryvnia treasury bonds. With 4-year bonds on offer for the first time since May, demand outstripped supply by a factor of five. The placement rate was 13.38% for the equivalent of $100 million in bonds. Selling the equivalent of $20 million in 1-year bonds, the Ministry compressed the yields to 14%, from 14.3% last week. Selling $12 million in 3-month hryvnia bonds, the Ministry compressed yields by one percentage point, to 14.35%, from 15.35% last week.
The Cabinet submitted to the Rada Tuesday a conservative budget for 2020 with a deficit of 2.09% of GDP. Previously, this figure was 2.28% in 2019 and 2.4% in 2018. Finance Minister Markarova told reporters: “The deficit of 2% of GDP is the same as we submitted for the first reading. The revenue side increased by 13 billion UAH [$520 million], the expenditure side – by 15 billion UAH [$600 million].” For new revenue, the draft budget allows for $120 million from legalized gambling and $240 million in from privatizations of state companies and sales of state properties.
Believing infrastructure spending is a great economic multiplier, the government increases spending in 2020. In the draft budget, road spending increases by 35%, to $3 billion; road safety spending doubles, to $127 million; and airport runway construction increases five-fold to $43 million. Additionally, there will be $20 million for bridges and $5 million for shipping locks. This core Ukraine government spending is to be greatly increased by soft loans from foreign donors and public-private concessions.
In a bad sign for renewables, Ukrenergo, for the first time, did not use the full amount of power produced Monday night by three DTEK wind power plants: Botievska, Orlivska and Prymorska 1. Andriy Gerus, head of the Rada Energy Committee and an opponent of renewable energy tariffs, said that Ukrenergo will pay for the unused electricity under the current ‘take or pay’ system. He said the money will come from nuclear and large scale hydro. The sponsor of a bill to end ‘take or pay’ for renewable projects over 150 MW, Gerus warns on Facebook: “The problem is growing, and in the spring it will become large-scale.”
- Grain Exports up 44%
- Alibaba in Your Mailbox?
- China Southern to Fly China-Ukraine?
- New Flights Connect Odesa to EU
Grain exports through September are up 44% in volume, to 40 million tons, and up 42.5% in revenue, to $6.8 billion, reports the Institute of Agrarian Economy. The top buyer is Egypt, which increased purchases by 75% y-o-y to nearly $1 billion. After Egypt, buyer of 14% of Ukraine grain exports, the next top buyers are: China – 10%; Spain – 7.5%; Turkey -7%; the Netherlands – 7%; Indonesia – 5%; Bangladesh – 4%; Israel, Tunisia and Italy – 3% each.
Climate change is changing the map of Ukraine’s crops, Tatyana Adamenko, a Ukrhydromettsentra officials, tells UNIAN. “Heat resources now allow you to grow sunflower and get a good harvest throughout the territory, while 30 years ago sunflowers did not ripen in the western and northern regions,” said the weather bureau official. Warmer temperatures are improving corn yields in Chernivtsi, Ivano-Frankivsk, and Ternopil. But hotter weather is cutting yields for early spring crops, such as barley and oats.
Ukraine’s central bank predicts that the economy will grow by 3.5% this year and next year, and by 4% in 2021. The predictions by the National Bank of Ukraine would put Ukraine in the upper tier of Eastern Europe growth rates. The bank predicts inflation will end this year at 6.3% and would be around 5% next year.
The Rada has approved a law against money laundering, a law protecting corruption whistle blowers, and a law restoring criminal punishment for illicit enrichment. Concorde Capital’s Zenon Zawada writes: “The People’s Servant parliamentary faction deserves credit for approving these anti-corruption measures (assuming they will be signed by the President). But nice laws on the books will be hollow if judges don’t apply the rule of law impartially and prosecutors don’t seek to prosecute and convict corrupt officials at all levels.”
Ernst & Young Audit Services will audit the National Bank’s annual financial statements for the next five years, the central bank’s press service reports. The previous auditor was Deloitte & Touche. The bank’s governing law limits an auditor to five consecutive years.
5G mobile internet will come to Ukraine by 2022, Alexander Shelest, deputy minister of Digital Transformation, predicts in an interview with LIGA.tech. He says mobile company executives predict a rollout of fifth-generation, or 5G, mobile internet within three years.
Prime Minister Honcharuk advocates selling up to one-third of the state post office to ‘strategic investors.’ He told the ‘Right to Power’ news show: “We can prepare to sell 20-30% of Ukrposhta’s shares to different shareholders who would come with their money cheaper, provide new resources to this enterprise, bring in the right corporate culture, and accelerate its development.”
In response, Ihor Smilianskyi, Ukrposhta director, wrote on Facebook: “He is 100% right. Moreover, I will be proud if we become the first large state-owned company to do this.” Last May, while attending an Alibaba logistics conference in Hangzhou, Smilianskyi wrote on Facebook: “I had negotiations with large Chinese companies. I did everything to convince them (and they are still ready) to come in and even participate in the possible privatization of Ukrposhta, using this opportunity to make a transit platform to Europe and Turkey. Alibaba loves working through partners and sharing risks with them.”
As the China International Import Expo opens in Shanghai to an estimated 300,000 visitors, new trade statistics show China is Ukraine’s top trading partner. Through August, China was the source of 14.7% of Ukraine’s imports, compared to 12.7% from Russia and 10.3% from Germany. On the export side, China took in 7.1% of Ukraine’s exports, compared to 6.9% for Poland and 6.6% for Russia. China officials vow to import $30 trillion of goods from around the world in the next 15 years.
After flying Ukrainians home from Beijing on Nov. 16, Ukrainian International Airlines stops Ukraine’s only direct air link with China. China Southern Airlines is studying flying the route, a Chinese trade official tells the UBN. With a mixed fleet of Boeings and Airbus, China Southern flies from Beijing to Georgia and Turkey. Unlike UIA, it would not have to make a costly detour around Russian airspace to reach Ukraine.
With more and more international flights, Odesa’s age-old cosmopolitan airs are starting to approach modern reality. With the new air links, Odesa is fending off fast-growing Kharkiv and retaining its title as Ukraine’s fourth busiest airport – after Kyiv Boryspil, Kyiv Sikorsky and Lviv.
Last weekend, Wizz Air started flying from Odesa. The discount airline now flies twice a week to its home base in Budapest, Berlin Schönefeld, Bratislava, Slovakia and three cities in Poland – Gdansk, Katowice, and Wroclaw.
Getting a jump on Wizz Air, Ryanair started flights last week from Odesa to Berlin Tegel, Budapest and four cities in Poland – Gdansk, Katowice, Poznan, and Wroclaw. Last June, Ryanair tested the waters with a pioneering flight from Odesa, to Krakow.
Italy’s Ernest Airlines adds Milan Bergamo on Dec. 18. Last April, it started flying from Odesa to Rome Fiumicino. SkyUp also entered the Odesa market this year, with flights to Barcelona, Kyiv, Kharkiv, Rimini, and Yerevan.
- Wind Turbines Taller than Kyiv’s Motherland Monument March Across Azov
- Wind/Solar Investors Fight to Freeze Rules of Game
- Privatizers Win Control of 500 State Ag Companies, Including Distilleries and Horse Breeding Farm
- Salaries up 35% in Dollars
- ’ Machinery’ Import Jump: Cars, Refrigerators, Solar Panels
One year after construction started, DTEK inaugurated Friday a 100 MW wind power plant in southern Zaporizhia Oblast, completing the €321 million, 200 MW Primorsk project. Marching across farmland on north shore of the Azov, 26 steel towers, each topped with a GE wind turbine, stand taller than Kyiv’s Motherland statue. Foundations for each tower go down 16-24 meters, below than the average 14-meter depth of the nearby Azov.
DTEK rushed construction to take advantage of ‘green tariffs’ and tax breaks on imports of wind and solar equipment. “We have already invested more than 1 billion euros in the construction of 1 GW of solar and wind power plants,” said Maksim Timchenko, DTEK CEO. With Friday’s inauguration of the Primorska, or ‘Seaside’, DTEK now has 500 MW of wind power capacity. With Thursday’s inauguration of the Pokrovska solar power plant, DTEK has 450 MW of solar power in southern Ukraine.
The inaugurations come as wind and solar investors fight to retain the tariff regime that drew them to invest in Ukraine. The Rada’s Energy Committee has approved a bill that would relieve Ukrenergo of its obligation to buy power from projects larger than 150 MW.
“Any retrospective decision by the Ukrainian authorities on renewable energy sources will have a negative impact on the confidence of international investors in Ukraine,” US Chamber of Commerce in Ukraine said Saturday after meeting with Prime Minister Honcharuk and other officials. “The confidence of international investors is a prerequisite not only for the renewable energy sector but also for ensuring a successful privatization process in the short term, launching concession projects to restore Ukraine’s infrastructure and attracting $50 billion in foreign direct investment.”
Similarly, five foreign investors in Ukraine wind energy projects warned in a letter last week to President Zelenskiy: “Any retroactive changes to current legislation for renewable energy would certainly put existing projects with leading international bank financings into default…will not only lead to large losses for investors but will unavoidably lead to foreign investors exiting the market.” The letter was signed by executives of NBT, Vindkraft Ukraine, LongWing Energy, Greenworx Holding, and Akuo Energy.
With an eye to privatization and foreign investment in the alcohol industry, Ukrspirt, the monopoly state alcohol producer was transferred over the weekend to the Ministry of Economic Development, Trade, and Agriculture, a political bastion for privatization. In advance, President Zelenskiy said that “criminal organizations” control 55% of the state companies’ output. Government officials charging that only 17 of Ukrspirt’s 84 companies actually function and that tax evasion reaches hundreds of millions of dollars a year. This month, an independent audit is being performed. Next month, the Rada is to pass a bill ending the state monopoly and allowing private companies to produce alcohol.
In a victory for privatizers, Economy Minister Tymofiy Milovanov writes on Facebook that his ministry has won control of 500 state agriculture companies. These include the State Food and Grain Corporation, an international grain trader; Artemsol, the state salt mine in Donetsk Oblast; and Koniarstvo Ukrayiny, the State Horse Breeding Agency. With no functioning race tracks in Ukraine and horsepower largely replaced by tractors, it is not clear what this agency does.
Thanks to the hryvnia appreciation against the dollar, Ukrainian wages are up 35% this year in dollar terms, calculates Oleksiy Blinov, Alfa-Ukraine research head. The hryvnia trades at 25 to the dollar, up 11% from its Jan. 11 levels of 28 to the dollar. Hryvnia wages – in inflation-adjusted terms – are up 10% y-o-y. According to the State Statistics Service, the average wage in September was UAH 10,537, or $432.
Steel output fell to 50,400 tons in October, the lowest level in post-Independence Ukraine, reports UkrMetalurgProm, the steel producers association. The 12.7% y-o-y drop was attributed partly to higher iron prices that made it more profitable for some vertically integrated companies to export iron ore, rather than refine it in Ukraine.
Ukraine had an $8.5 billion deficit in goods and services for the first three quarters, 5% higher than the deficit for the same nine months of last year, according to the National Bank of Ukraine. The deficit in goods increased by 9%, to $9.7 billion. The surplus in services increased by 50%, to $1.2 billion. In September, exports were up 10% y-o-y, propelled by a 29% surge in food sales. Imports were down 2.4%, largely due to falling prices of oil and gas.
September imports of machinery were up 16% y-o-y, to $365 million. But an Alfa-Ukraine analysis sees feeble industrial investment. Cars accounted for one third. Solar panels and wind power turbines accounted for another third. Refrigerators accounted for $6 million. Only $27 million – or 7% – went to machinery for oil and gas drilling, seed crushing and wood processing.
The original English version is from our partner UBN – Ukraine Business News. For more information and news archive, go to: www.ubn.news.