• EBRD Loans €1.1 billion to Ukraine, Second only to Egypt
  • Gambling Bill Advances
  • Pulling the Trigger on GDP Warrants?
  • Big Mac Index Indicates More Room for a Stronger Hryvnia
  • After Shootdown, UIA to Ask for Bailout?
  • Airports to Watch: Chernivtsi, Kherson, and Zaporizhia

EBRD invested €1.1 billion in 51 Ukraine projects last year. Of the 38 countries where the development of bank loans money, Ukraine was second only to Egypt for the volume of investments and first for the number of projects. In Ukraine, 62% of the loans, or €680 million, were for ‘green’ projects, Anton Usov, the regional spokesman for the European Bank for Reconstruction and Development, writes on Facebook. Investments went to a variety of sectors: solar, wind, electricity transmission, pharmaceutical, agricultural, road, and rail.

Deutsche Bahn executives met in Kyiv yesterday with Prime Minister Honcharuk. “Wait for good news soon,” the Prime Minister wrote on Telegram below a photo with Andreas Wegerif, Managing Director of International Markets and Consulting at DB Engineering & Consulting. Separately, the German rail company announced that it had signed a 10-year, €86.2 billion investment agreement with Germany’s government. This is to increase annual investment by 50%.

The Rada has passed on first reading a gambling bill. It would restrict slot machines to 3-, 4- and 5-star hotels, would allow casinos only in 5-star hotels, would restrict gambling advertising, would criminalize gambling without a license. and would ban Russian citizens and Ukrainians under 21 from gambling in Ukraine. On Dec. 19, a similar law failed in the Rada. In the following days, to encourage gambling groups to support the law, the government closed 5,300 illegal gambling establishments.

A Rada debate on a draft law to block former owners of Privatbank to reverse its nationalization has been moved from January to February, Kateryna Rozhkova, first deputy governor of the National Bank of Ukraine, told reporters Thursday. Two Privatbank court cases delayed until late January presumably now will be delayed again.

The Cabinet of Ministers is pushing for new laws that would allow state bank managers to attack the mountains of nonperforming loans, Finance Minister Markarova said Thursday. “We want to more rapidly reduce the state’s share in this sector, we want to quickly find effective owners or international partners for state banks,” she said at a presentation of the Strategy for the Development of the Financial Sector until 2025. “2020 will be the year when we finally, we are very actively and efficiently resolving the problem of legacy of problem loans in state-owned banks.”

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Despite last year’s 16.5% appreciation of the hryvnia, The Economist magazine’s latest Big Mac Index indicates that Ukraine’s currency is undervalued by 58%. At today’s exchange rate of 24 hryvnia to the dollar, a Big Mac costs $2.37. In the US, it is $5.57. A stronger hryvnia causes pain for managers who earn in hryvnia, but pay expenses pegged to the dollar.

“Can Ukraine International Airlines Survive Iran’s Fatal Plane Downing?” asks an article in Forbes. Author Katya Gorchinskaya notes that the shootdown came as Ukraine’s flagship carrier was climbing back from 2018 when it lost $100 million. In the first half of 2019, passengers were up 8%, planes were flying with fewer empty seats, and 49% of passengers were in transit. In last week’s flight from Tehran, 83% of the 167 passengers killed were booked on UIA’s connecting flight to Toronto.

The Zelenskiy administration wants domestic air traffic to grow by 20% this year, twice as fast as international, Oleg Yushchenko, deputy infrastructure minister, tells the Center for Transportation Strategies. To boost internal air traffic, Rada committees have approved lifting VAT from domestic flights. Now, the Rada is considering cutting excise taxes on jet fuel. The State Aviation Administration forecasts the passenger flow through Ukrainian airports will increase this year by about 10%, to 27 million. Of these, about 10% would be passengers on internal flights.

The use of private investor concessions to revive three regional airports – Chernivtsi, Kherson, and Zaporizhia – is being studied by the World Bank’s International Finance Corporation, Yushchenko said. All three had single-digit growth last year, well below the national air passenger growth figure of 18.5%. Zaporizhia is primed to take off this year with the opening in March of its $20 million new terminals and the launch of direct flights to 12 EU cities.

Kherson’s traffic may jump by one third this year on the back of new international flights. Over the last month, Ryanair started flying from Kherson to two Polish cities – Katowice and Krakow. In March, Ryanair’s subsidiary, Lauda, starts flying from Kherson to Vienna. SkyUp says that Crimea residents account for about one-third of passengers on its seasonal flights from Kherson to Turkey and Egypt. Kherson, Ukraine’s closest airport to Crimea, may handle 200,000 passengers this year, predicts Yuri Gusev, chairman of Kherson Region.

While Chernivtsi’s Hapsburg empire architecture draws rave reviews from international tourists, the airport has yet to develop international traffic beyond charters to Antalya, Turkey and the occasional nostalgia group charter from Vienna. With a UIA flight to Boryspil as its sole scheduled flight, Chernivtsi airport saw its passenger flow grow by only 4% last year, to 76,832.

  • China Looks at Rivne Airport for an Air Cargo Hub
  • No Internet Detox for Airplane Passengers
  • Deutsche Bahn Courts UZ
  • Zelenskiy To Davos
  • Google Opens R&D Unit in Kyiv
  • Waikiki Plans to Triple Ukraine Clothing Stores to 90 

Power China, a big Chinese construction company heavily involved in Beijing’s Belt and Road Initiative, signed a memorandum of cooperation with regional officials to develop Rivne International Airport. The largest airport in northwest Ukraine, Rivne has a 2,626-meter long Soviet-era runway. Ranked 13th in the nation for passengers, Rivne airport handled only 11,000 passengers last year, largely on SkyUp flights to Egypt.

Located 100 km east of the Polish border, Rivne is seen as a potential international cargo hub. Power China, one of the world’s leading global engineering design companies, is carrying out two major projects in Ukraine. It is building a 6-lane, 22 km highway bypass around Zhytomyr, complete with three interchanges and 10 bridges. In the south, the Beijing company is the engineering, procurement and construction partner of Norway’s NBT, building a 63 turbine, 250 MW wind power project in Syvash, Kherson Region.

Airplane passengers soon will be able to use the Internet while flying across Ukraine, from takeoff to landing, the Cabinet of Ministers of Ukraine decided yesterday. “Ukrainians will be able to use the Internet even while flying on an airplane,” Prime Minister Honcharuk said. Expanding mobile ranges, he added, “is an important step towards the emergence of the high-quality Internet in small villages and remote regions.”

Five years after the Malaysia Airlines shootdown over occupied Donbas, foreign airlines are gradually returning to flying through Ukraine’s airspace, reports the state Air Traffic Services, or UkSATSE. Flyover traffic was up 13% y-o-y last year, to 141,680. After the July 2014 shootdown, flyover traffic fell by 75%. Two years ago, it started to creep back up. Last year’s level is 40% the level of 2013. Overflights are a major contributor to the budget of Ukraine’s air traffic control agency.

Deutsche Bahn, Europe’s largest rail company, is sending a delegation to Kyiv in the coming days, to discuss with Ukrzaliznytsia a strategic partnership, reports the Center for Transportation Strategies. Rail executives would be joined by executives from E.ON, the German electric power company, Dmitry Stratievsky, a former Bundestag deputy, writes on his Facebook page. With a partnership under discussion for three years, experts interviewed by CTS see upsides: using German technology to modernize Ukraine’s rail infrastructure; joint projects to better organize a movement of goods and passengers from Ukraine to the EU; and the development of transit freight.

During the winter lull in the road construction season, the Cabinet of Ministers has approved 4,034 km of road sections to be rebuilt this year – two thirds more than last year. Of the roads, 1,345 km are of ‘national importance’ or linking regional capitals. This year’s road budget is a record $1.3 billion.

Sales of new motorcycles and mopeds jumped by 50% last year y-o-y, to 34,000, reports Auto-Consulting. The analytical group reports: “The Ukrainian motorcycle market experienced a real “boom” in sales in 2019 and will surely go down in history as one of the most successful.”

President Zelenskiy will meet with investors this week at Ukraine House Davos. Investors participating in four days of panels include Johan Eliasch, Chairman and CEO of HEAD; Yuriy Kosyuk, Founder and CEO of MHP; Michael Yurkovich, CEO of TIU Canada; and Shannon Kalayanamitr, Venture Partner of Gobi Partners. Alexa Chopivsky, Executive Director of Ukraine House Davos, says: “We strive to tell the real story about Ukraine: to go beyond headlines and show the ground-breaking changes taking place in the country, spurring high-growth companies and sectors, and some of the most attractive investment opportunities in Europe.”

Privatization of Ukraine’s 3,000 state companies will be promoted at Davos by Dmitry Sennichenko, head of the State Property Fund. At the World Economic Forum, he is to speak on the topic “Ukraine is the Place of Europe’s Strength and is to have bilateral meetings with foreign investors interested in Ukraine.

To help investors get more accurate and comprehensive information on state companies up for sale, the Properly Fund started running last week in test mode “virtual data rooms.” These document repositories are to be created for the largest of the 500 companies scheduled for sale this year.

Vinnytsia Aviation Plant is one of nine Cold War-era defense plants that UkrOboronProm plans to auction off this year through the State Property Fund. Others include Zaporizhia Automobile Repair Plant; Ivano-Frankivsk boiler and welding plant; 171st Chernihiv repair plant; Nezhinsky repair plant engineering weapons; Kharkiv transport equipment plants; and in Kyiv the Central Research Institute of Navigation and Control and Ukroboronresurs.

Google Ukraine opened an R&D office in Kyiv this month, becoming the third Google Eastern Europe office to have R&D, after Google Poland and Google Hungary. In Ukraine, Google acquired CloudSimple in November and recently integrated the 30 employees into the Google structure, reports AIN.UA, the IT news site. An outgrowth of Ciklum, CloudSimple develops ‘VMware’ – software that allows users to create virtual machines on physical servers and to migrate them to the cloud. The Kyiv office is located in Astarta Business Center.

Through November, the renewable share of Ukraine’s electricity production has more than doubled, growing from 1.7% to 4.1%. Over the same period, the share of electricity produced by thermal power plants decreased from 38% in November 2018, to 32.0% in November 2019, reports the Energy and Environment Ministry. Last year, €3.7 billion was invested in solar, wind and biogas creating 4,500 MW of capacity, according to the State Energy Efficiency Agency. Today, with the future of ‘green tariffs’ unclear, some renewable projects have been halted.

US-based Holtec International has completed construction and transferred the dry spent fuel storage facility to the Chornobyl Nuclear Power Plant. Next month, ‘hot tests’ are to start with the transfer of 186 spent fuel assemblies to the new storage facility, reports the state-owned power plant.

With medical tourism growing, the average spending by foreign patients grew by almost one-third last year, to $2,800, estimates Ihor Torsky, vice president of the Ukrainian Association of Medical Tourism. Torsky talked to reporters to promote the Global Medical Tourism Forum Healthcare Travel Forum 2020, which will take place in Kyiv city and Lviv region on April 22-25.

Waikiki, the French-inspired, Turkish-owned fashion retailer plans to triple its Ukraine stores, to 90 by 2023, the company reports. With 32 stores in Ukraine today, Waikiki plans to open in coming weeks its largest store ever – a two-level, 1,880 square meter store in River Mall, on Kyiv’s Left Bank. Founded in 1988, the chain now has more than 990 stores in 47 countries.

  • Chinese Buy Ukrainian Stock Exchange
  • Demand High for Government Bonds
  • GDP Warrants Hit Par
  • Goal: 1 Million New Jobs by 2024
  • Traveling Nation: 30% More Ukrainians in Airplane Seats, 43% More Drive Their Cars to EU
  • Ukraine Airlines Race to Grab Ernest’s, Italy Market

China’s Bohai Commodity Exchange has acquired a 49.9% stake in PFTS Stock Exchange, Ukraine’s second-largest exchange, after Perspective. Last year, PFTS handled $3.2 billion in trades, 38% of the volume on Ukraine’s three exchanges. Two years ago, the Tianjin-based exchange, known as BOCE, purchased the Ukrainian Bank for Reconstruction and Development.

A Singapore business delegation will visit Ukraine this year and a Ukraine-Singapore business forum will be held in Singapore, Ukraine’s Foreign Minister Vadim Pristayko tweeted Tuesday at the end of a two-day visit to the island nation. Pristayko met with Singapore Prime Minister Lee Hsien Long and discussed the country’s Smart Nation e-government project with officials. Also on Tuesday, the Rada approved a bill to end double taxation between the two countries. With only 5.7 million people, Singapore has a $370 billion GDP, more than twice as large as Ukraine’s.

British and Ukrainian diplomats on Tuesday started ‘working consultations’ about a bilateral free trade agreement, tweets Ukraine’s Foreign Ministry.  Larger negotiations, between the UK and the EU over Brexit, are to start Jan. 31.

With interest rate cuts expected a week from now, the Finance Ministry’s first government bonds auction of the new year was four times oversubscribed, allowing the government to depress yields by about one percentage point across the board. Buying hryvnia bonds, investors paid UAH 6 billion, the equivalent of $250 million. About half of purchases were of 4-year bonds, where the weighted yield dropped by 102 basis points to 9.88%.

Ukraine’s GDP warrants, which were offered to bondholders during the 2015 debt restructuring, hit par, or 100%, this week. Over the last 18 months, as investor confidence returned to Ukraine, the warrants almost doubled in price.

The Economy Ministry has a five-year plan to create one million new jobs by 2024, Economy Minister Timofei Milovanov told the Rada last Tuesday during a debate over a new Labor bill. At the same time, the government wants to cut the job search time to two months and the unemployment level to Europe’s average – 5%. Employers say that last year’s 10% growth in real wages combined with the 16.5% appreciation of the hryvnia to erode incentives to emigrate to Poland.

Low wages have prompted several deputy ministers to quit the Cabinet, Milovanov said at the same debate. Stressing that his ministry has not suffered losses, he said: “It is because they have a salary of 18,000 hryvnias and an Uber driver can earn more. If we want qualifications to be appropriate, we need to pay appropriate salaries.”

Advertising in Ukraine is to grow by 18% this year, slowing from 25% growth in 2019, predicts the All-Ukrainian Advertising Coalition. Of the $1 billion markets, TV took about half of advertising last year. This year is to see 25% growth for direct marketing and 20% for sponsorships. The second-largest sector, online, grew by 25% last year, to $240 million. This year, banner ads are to grow by 20% and digital video by 30%.

Starting tomorrow, all ads on TV, radio, and print must be in Ukrainian. Media in the official languages of the EU may run ads in these languages. Russian is not one of the 24 official languages of the EU.

The number of Ukrainians traveling internationally by airplane jumped by 30% last year, to 15.1 million, reports Ukraine’s Border Guard Service. By contrast, land crossings of Ukraine’s border with its four EU neighbors were flat – 36.7 million people of all nationalities. And land crossings on the Russia-Ukraine border – by all nationalities – were down by 10% to 10 million. Commercial air flights between Russia and Ukraine stopped four years ago. Further underlining the EU allure, the numbers of Ukrainians traveling to Belarus were down 9% and to Moldova were down 6%.

Indicating an upsurge in cross-border driving, the number of Green Card international insurance contracts taken out by Ukrainians increased 43% through November y-o-y, to over one million. These insurance policies are obligatory for driving in the EU.

Speeding trucks across Ukraine’s EU land borders, more than 8,000 international haulage permits were issued in the first half of January by the new electronic services portal. In addition, full truck scanners are now working at eight of Ukraine’s EU border control posts. Prime Minister Honcharuk wrote on his Telegram channel about the scanner at Chop, the main crossing point for Hungary: “At the Chop checkpoint, the cargo inspection was reduced to seven minutes, instead of 3-4 hours!”

Within hours of Saturday’s closing of Milan-based Ernest Airlines, two low costs Ukraine airlines jumped to take Italy-Ukraine air traffic. Yesterday, SkyUp started selling tickets for a host of new routes and increased frequencies to Italy from Kharkiv, Kyiv Boryspil, Lviv, and Odesa. SkyUp’s new route map shows flights from Ukraine to 10 Italian cities. Also Windrose, another Ukrainian low-cost carrier, announced summer flights from Kyiv Boryspil to Ancona, Brindisi, and Lamezia Terme. Moving to capture Ernest’s traffic between Albania and Italy, Wizz Air announced that it will fly between Tirana and five Italian cities.

With Kyiv banning Ukrainian aircraft from flying through Iranian airspace, UIA will end its flight to Bangkok in the coming weeks and is reviewing its Dubai flight, UIA President Yevgeny Dykhne tells LB news site. By flying around Iran, flights to Bangkok are no longer profitable. Flights to Dubai have stretched from 5.5 hours to 8 hours, necessitating refueling stops.

  • China Tops Russia for Ukraine Trade
  • Grain Exports to Grow 8%
  • Air Passengers up 18.5% to 24 Million in 2019
  • Zaporizhia To Get Flights to 12 EU Cities
  • Ukraine Passport Opens Twice as Many Doors as a Decade Ago
  • Tourism Tax Receipts Double in Kyiv

China displaced Russia last year as Ukraine’s top single nation trading partner, according to trade statistics for the first 10 months of the year. China-Ukraine trade was $10.5 billion, 21% more than the Russia-Ukraine trade, which was $8.6 billion. In the last weeks of the Poroshenko administration, bilateral trade sanctions were increased. To duck sanctions, much trade between Russia and Ukraine passes through Belarus. After Germany at $7 billion and Poland at $6.2 billion, Belarus came in as Ukraine’s 5th largest trading partner, with $4.4 billion.

Ukraine’s grain exports will be up 8% to 54 million tons, the second record year in a row, forecasts the Economic Development, Trade and Agriculture Ministry. During the first half of the current 2019/2020 marketing year, Ukraine’s exports were up 32%, to 32 million tons. Measured in million tons, exports were: wheat – 15.1; corn – 12.8; and barley 3.8. The 2019 harvest was up 7%, to 75 million tons. With domestic consumption virtually flat, all harvest increases are exported.

Passenger traffic at Ukrainian airports grew by 18.5% y-o-y, to 24.3 million people, reports the State Aviation Service of Ukraine. By comparison, air passenger traffic in 2018 grew by 24.5%, to 20.5 million people. Last year, international travel grew by 20%. It accounted for 90.5% of all air travel in Ukraine.

Kyiv Boryspil increased its passenger traffic by 21.1%, to 15.3 million people. Once again Ukraine’s busiest airport, Boryspil handled 63% of the nation’s traffic. With the re-opening of Terminal F last spring for international low-cost carriers, Boryspil saw its international traffic increased by 22.2%. Its domestic traffic grew by only 8.3%. To improve airport amenities and to earn more revenue, the State Property Fund announced last Monday that it intends to rent at public auction 14 lots in Terminal D and 15 in Terminal F.

Traffic at Kyiv’s second airport, Sikorsky, was down 7% last year, to 2.6 million passengers. Traffic suffered from the move by SkyUp and half a dozen airlines last spring to Boryspil’s Terminal F. With last weekend’s closing of Ernest Airlines, Sikorsky now is essentially a Wizz Airport. The Budapest-based discount airline accounts for 86% of the airport’s foreign destinations. Last year, 98% of the traffic out of Sikorsky was international.

With fog frequently diverting flights to Boryspil, Sikorsky’s operators want to extend the airport’s sole runway by 25%, to almost 3,000 meters. Boryspil has two runways: one 3,500 meters long and the other 4,000 meters. As part of a €100 million expansion plan, Denis Kostrzhevsky, head of the airport’s board of directors, has asked Kyiv City to expropriate 12 hectares for an expanded runway and improved navigation systems. Located on the Right Bank, Sikorsky first opened as a military airfield in 1923, almost four decades before Boryspil.

Zaporizhia Airport is to emerge this year as the dominant airport for Ukraine’s southeast. In March, the airport opens a $20 million new steel and glass terminal capable of handling one million passengers a year. This follows a resurfacing of the runway last fall. Despite the runway closure for six weeks, Zaporizhia airport recorded an 8% increase in passengers last year, to 434,400.

Timed to the opening of the new terminal, Wizz Air and SkyUp plan to launch service this spring from Zaporizhia to 12 new foreign cities. Today, there are flights to only three foreign cities. At the end of March, Wizz Air launches direct flights to Budapest, Gdansk, Krakow, Vienna, Vilnius, and Wroclaw. In late May, SkyUp plans to base a Boeing in Zaporizhia and start flights to Barcelona, Batumi, Burgas, Lanarca, Rimini, and Sharjah. SkyUp already offers flights to Kyiv-Boryspil and Tel Aviv.

A Ukrainian passport gives its holders visa-free travel to 128 countries in the world, double the number of a decade ago, according to the latest ranking by Henley & Partners, a global migration consultancy. By doubling since 2010, Ukraine became the world’s sixth-biggest climber in travel freedom over the past decade. Now located in 43rd place, Ukraine is well above Russia, in 51st place.

Kyiv doubled income from its tourist tax in 2019, to $2.6 million. Foreign visitors pay $1.75 per night in tax. It is unclear how much is levied from the estimated 10,000 Airbnb beds in the center of Kyiv. Marina Honda, deputy head of the Kyiv City State Administration, said of the tax revenue surge: “This indicates that Kyiv is becoming more and more interesting for tourists both from Ukraine.”

During the first half of 2019, 900,000 foreign tourists visited Kyiv, Honda said. In the summer and fall, this figure was boosted by an advertising campaign with Ryanair that targeted Germany, Ireland and the UK.

Ukraine’s government has budgeted $10 million for tourism promotion in 2020. By the fall, a single tourism portal – online and by telephone – will open to help foreign visitors with their trips to Ukraine, says Prime Minister Honcharuk. He says: “It is necessary to create all conditions for increasing the flow of tourists coming to Ukraine.” The Culture, Youth and Sports Ministry is setting up a national agency and local tourist information centers in the regions.

By spring, Ukraine’s first three Tesla Supercharger stations should open, probably on the Kyiv-Lviv highway, reports Nazar Shimon-David, head of Tesla Club Ukraine. The latest model can give Tesla another 120km of driving power in five minutes.

Ukrainians registered 7,542 additional electric vehicles last year, a 42% jump over 2018, reports UkrAutoProm, the car industry association. Of the 7,012 passenger cars, 92% were used imports. The average age was four years. Nissan Leaf accounted for almost half of new registrations. Of the nearly 500,000 new registrations of cars in Ukraine last year, electric cars represented only 1.4%.

Kyiv Metro ridership was virtually unchanged last year, with the system selling almost half a billion fares. The ranking of the three lines also is unchanged: Redline – 203 million rides; Blue line – 173 million; and Greenline – 119 million. The busiest and least used stations of the 52 in the system were both on the Redline. Akademmistechko, the line’s Western terminus, handled 21.3 million passengers.  Dnipro handled 939,000.

  • Big Interest Rate Cuts Ahead
  • Campaign Against Tax Evaders: Gambling, Logging, Gas Stations
  • Ukraine is the World’s Fastest-Growing Food Exporter to the EU
  • Farmers Feud With Railroaders, But UZ Hauls Record Grain Volume
  • Ciao Ernest!

Ukraine’s prime rate may be slashed this year to 8% – one year ahead of schedule, Yakov Smoliy, governor of the National Bank of Ukraine, tells Project Krym. “Business can rates on loans at the level of 10-12% per annum in UAH,” Smoliy predicts in the summary on Facebook. This would mean a 550 basis point cut from the current level of 13.5%

With Ukraine’s 13.5 prime rate more than triple December’s 4.1% inflation, economists predict radical interest rate cuts. The next central bank board meeting, on Jan. 30, “is likely to bring a new wave of acceleration in rate-cutting, with the decision probably coming to a 300 bps cut,” Oleksiy Blinov, head of research of Alfa-Bank Ukraine, wrote last Saturday. He noted: “In December, the Consumer Price Index decreased 0.2% m-o-m, marking the first case of deflation at the end of any given year in Ukraine’s history.”

December’s deflation may provoke the central bank to reverse course and nudge inflation back up to the 2020 goal of 5%, Serhiy Nikolaychuk, deputy economy minister writes on Facebook. “Most likely, in the near future, the task will be the opposite – to raise inflation to the target,” he writes. Referring to rock bottom interest rates in the US, EU, and Japan, he adds: “I think there should be no problems in this regard, unlike the central banks of developed countries.”

In the first year of a major foreign currency liberalization, the volumes of buying and selling currency online by Ukrainian individuals were almost evenly balanced at $1 billion each, reports the central bank. On Feb. 7, a liberalization package authorized online purchases of foreign currency by individuals. On Nov. 5, the central bank canceled the daily limit for the purchase of foreign currency. It had been the equivalent of $6,250.

Crackdowns on illegal gambling, logging, and gas stations are part of a drive to shrink Ukraine’s shadow, of the book’s economy, Prime Minister Honcharuk said Saturday at a meeting with leaders from the 24 regions. He wrote on his Facebook page: “Shadow schemes mean money stolen from every Ukrainian. 2020 will be the year of the de-shadowing of the Ukrainian economy.” In the last two weeks, police have closed 900 illegal gambling halls and 707 gasoline stations that were not paying fuel taxes. On Feb. 1, Ukraine is to have a centralized, digital record of all cut timber.

A mild winter, with rain and temperatures above freezing, has put Ukraine on track for a strong winter wheat crop, according to Tetyana Adamenko, the state weather forecaster. In the fall, abnormally dry weather raised concerns about seeds germinating. Winter wheat accounts for 95% of the nation’s wheat crop. Last year, Ukraine harvested 28.1 million tons of wheat, 14% more than in 2018.

Ukraine was the world’s sixth largest wheat exporter in 2018. The ranking was: Russia – $8.4 billion (20.5% of total wheat exports); Canada – $5.7 billion (13.8%); US – $5.5 billion (13.2%); France – $4.1 billion (10%);  Australia – $3.1 billion (7.5%); Ukraine – $3 billion (7.3%).

Facing a world sugar glut and weak prices, Ukraine’s sugar refiners cut their production by 19% during the recently completed milling season. This follows a 15% drop last year. Sugar prices are 14 US cents a pound, well below the average of the last decade. With the acreage planted in sugar beets down by 20%, nine refineries never opened their doors this fall, down from 42 last year. This year’s production was 1.5 million tons, reports Ukrtsukor, the sugar producer association. Top three producing regions are: Vinnytsia – 331,900 tons; Khmelnytskyi -192,800 tons; and Ternopil -186,400 tons.

Despite farmer complaints about EU quotas, Ukraine was by far the fastest-growing food exporter to the EU in the 12-month period ending last October, reports European Integration Portal. Of the top 20 exporting nations to the EU, only two achieved double-digit growth: Ukraine + 41%, to €7.3 billion; and Peru +18%, to €2.6 billion. With this jump, Ukraine displaced China to become the third-largest food supplier to the EU. The top two are the US +6%, to €12.3 billion; and Brazil -2%, to €11.7 billion.

Reflecting the importance of food, Ukraine’s overall exports to the EU increased by only 7%, during January-October, compared to the same period in 2018, reports Ukraine’s State Statistics Service.

Despite farmer complaints about the railroad, Ukrzaliznytsia transported 40 million tons of grain last year, 20% more than 2018 and an absolute record for the three decades since Independence. Yevhen Kravtsov, CEO of the state railroad, writes on Facebook that the increase is due to better coordination with farmers and logistics companies and faster turnarounds of UZ’s 28,000-grain hopper cars.

Ernest Airlines, the largest provider of flights between Italy and Ukraine, ended all flights last Saturday. In two years, Ernest grew to have flights from Kharkiv, Kyiv Sikorsky, Lviv and Odesa. From Kyiv, it flew to six Italian cities. On Dec. 29, the Italian National Civil Aviation Administration temporarily suspended the operating license of the Milan-based airline, without publicly explaining reasons. “All aircraft have been returned to their lessors,” Jakob Wert reports in International Flight Network.

Olena Lytvynenko, the Kyiv Region judge who tried to ground Ukraine’s low-cost airline SkyUp last May, has been fired by the High Council of Justice. Lytvynenko tried to ground the airline based on the complaint of a local woman, Oksana Pasenko. RFE’s Scheme reporters soon discovered the flight did not exist, that Pasenko did not have a passport, and that she had never flown on an airplane. It is not clear if a bribe was made to the judge.

The original English version is from our partner UBN – Ukraine Business News. For more information and news archive, go to:

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