The Ukrainian Agri Council and the Association "Ukrainian  Agribusiness Club " thank Ukrzaliznytsia and the Ministry of Agrarian Policy for implementing positive changes regarding auctions for the use of grain wagons. Agrarians appealed to the Minister of Agrarian Policy and Food of Ukraine, Mykola Solskyi, with a request  to continue this practice in the future in order to reduce the speculations.

Due to high surpluses of grain from the past and current harvest, there is a disproportion between high demand and lack of supply for the grain transportation abroad.

 Such an imbalance affects the price of using grain wagons. So, in particular, according to the results of the auctions held on September 14, 2022, the average price for the use of a grain wagon amounted to UAH 11,224/day.

According to the appeal, at the end of September, agrarians made a proposal to JSC "Ukrzaliznytsia" to resume the auction of lots with grain wagons of JSC "Ukrzaliznytsia" up to 2-3 months ahead of the date of the auction. It reduces the imbalance of supply and demand for railway freight transportation of grain. In addition, to improve the planning of transportation and avoid speculation, it was proposed to shorten an electronic application deadline to a maximum of 3 days after the end of the auction in terms of lots for the use of wagons that are exhibited at auctions.

Thus, during October 3-10, 2022, auctions were held for the use of grain wagons with a daily load of 250 wagons in November-December (5 lots of 50 wagons per day) with early submission of an electronic application within 5 days after the end of the auction. Loading and unloading site - Ukrzaliznytsia. That is, in fact, about 50% of the expected amount of grain wagon services for November-December 2022 was put up for auction. According to the results of the auctions, the average bid for successful auctions amounted to UAH 2,710/wagon-day. Among the participants and winners of these auctions were mainly agro producers, which significantly reduced the speculations.

 "As a result, UCAB and UAC are convinced of the need to exhibit about 50% of lots and submit an electronic application in advance - no later than 5 days after the auction. It will keep a balance of participants’ interests in railway transportation and reduce the speculations at the auctions. All that extremely negative influences the agro producers’ incomes and their ability to produce grain and oil crops in 2023," the appeal emphasizes.

Given the above, the agricultural community asks to prevent the return the auctions speculations and to continue conducting the auctions (about 50%) for the use of grain wagons owned by JSC "Ukrzaliznytsia" with the advance submission of an electronic application. It helps preserve the balance of interests of all participants in railway freight transportation, in particular, agricultural producers.

Friday, 14 October 2022


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