Ukrzaliznytsia cannot bring down prices for grain transportation with dumping – Tkachev

KYIV. Dec 12 (Interfax-Ukraine) – JSC Ukrzaliznytsia occupies about a quarter of the market for the transportation of grain cargo by rail, therefore it cannot reduce the cost of rental by offering cars at prices below the market ones, although it tried to do this in September this year.

This opinion was expressed by Valeriy Tkachev, the deputy director of the department of commercial work of Ukrzaliznytsia, at the conference "Doing Agribusiness in Ukraine" organized by the Ukrainian Agribusiness Club association.

"In October, the harvest of the late group of grains began. Demand grew and the cost of the wagon increased. Ukrzaliznytsia cannot significantly influence this market. There were proposals to bring down the price on the market at the expense of our wagons, which we tried to do in September, but this is not our task. We have a task to ensure transportation and efficient use of the provided assets. The state gave us 7,000 grain carriers for use, and we are using them effectively," he said during the press conference.

"They must earn money. The task of Ukrzaliznytsia is not to support anyone by reducing revenues from the wagon component. I think this is the task of the Agrarian Ministry," Tkachev added.

According to him, only 25-27% of grain cargo is transported by Ukrzaliznytsia wagons, the remaining 73-75% falls on the wagons of private companies, of which there are more than a hundred in the country. At the same time, the market for such transportation is unregulated, and the state does not interfere in it.

"Indeed, the price of a grain carrier was raised because it is a seasonal mode of transport, and its cost per year can really range from UAH 200 to UAH 20,000. If demand grows, the cost of wagons increases accordingly. The cost of transportation itself cannot change and the cost of wagons fluctuates. And this increase in the cost of wagons is due to the fact that farmers want to export 50 million tonnes of grain per year, although the infrastructure is able to transport 3 million tonnes per month, or 30 million tonnes per year," Tkachev stressed.

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