08KYIV835, WHOOPS: UKRAINIAN GOVT REVERSES LIFTING OF GRAIN

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Reference ID	Created	Released	Classification	Origin
08KYIV835	2008-04-29 02:33	2011-08-30 01:44	UNCLASSIFIED//FOR OFFICIAL USE ONLY	Embassy Kyiv

VZCZCXRO0276
PP RUEHLN RUEHVK RUEHYG
DE RUEHKV #0835 1200233
ZNR UUUUU ZZH
P 290233Z APR 08
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC PRIORITY 5460
INFO RUEHRC/USDA WASHDC
RUCPDOC/USDOC WASHDC
RUEATRS/DEPT OF TREASURY WASHDC
RUCNCIS/CIS COLLECTIVE

UNCLAS KYIV 000835 
 
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: WHOOPS: UKRAINIAN GOVT REVERSES LIFTING OF GRAIN 
EXPORT RESTRICTIONS 
 
REF: KYIV 807 
 
Treat as Sensitive but Unclassified.  Not for Internet. 
 
¶1. (SBU) Summary: In contradiction to a public announcement 
by Prime Minister Tymoshenko on April 23, a government 
decree released on April 25 failed to eliminate grain 
export restrictions, only relaxing the quotas instead.  The 
flip-flop was a complete surprise and followed an 
outpouring of international support for lifting the 
restrictions.  Post will try to seek clarification and 
continue to press the GOU to end the quota regime.  End 
Summary. 
 
¶2. (U) Despite Prime Minister Yuliya Tymoshenko's April 23 
announcement that her government had decided to lift the 
country's grain export restrictions (reftel), the official 
Cabinet of Ministers decree, dated April 23 but released to 
the public only on April 25, called for a relaxing of the 
grain quotas, not their outright abolishment.  Cabinet of 
Ministers Resolution #418 increased the quota on wheat from 
200,000 tons to 1.2 million tons and the quota on barley 
from 400,000 tons to 900,000 tons, both effective 
immediately.  The quota on rye remained at 3,000 tons.  The 
quotas are scheduled to remain in place until July 1, but 
could be extended further. 
 
¶3. (U) Publication of the government decree followed an 
outpouring of international support for Tymoshenko's 
announcement that restrictions would be eliminated 
entirely.  World Bank President Robert Zoellick phoned 
Tymoshenko and President Viktor Yushchenko on April 24 to 
thank Ukraine for removing the export restrictions, calling 
the move "an important contribution to addressing the 
global food crisis," according to a World Bank press 
release.  Even after publication of the decree, the 
Ukrainian government website proudly featured a news story 
on the Zoellick call to Tymoshenko.  In addition, media 
reports indicated that world wheat prices had fallen to a 
six-month low on April 24, in part due to Tymoshenko's 
announcement and the promise of more Ukrainian grain to 
reach world markets. 
 
Comment: Major Gaffe by GOU 
--------------------------- 
 
¶4. (SBU) This turn of events is an extremely embarrassing 
blunder by the GOU.  That the Prime Minister would err in 
announcing a government decree that she had supposedly 
already signed leaves one only to wonder if the government 
was deceitful, had a change of heart, or was just inept. 
The relaxation of the grain quotas is still a positive 
trend, but the GOU has likely destroyed any goodwill that 
could have been generated by the move.  In the meantime, 
Post will seek clarification on what happened and continue 
to press the GOU to lift grain export restrictions 
entirely, an important WTO commitment.  If it takes no 
action to clarify the gaffe and the April 23 decree 
remains, Ukraine will be in violation of its WTO 
commitments as soon as it becomes a full member on May 16. 
End comment. 
 
TAYLOR

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