Three Western ambassadors to Ukraine, including the U.S. envoy, criticized Ukraine's government on Thursday for putting limits on grain exports, saying they could harm its bid to join the WTO and discourage foreign investment.

"Our view that it is not necessary to intervene in the market," U.S. Ambassador William Taylor said during a news conference with the German and Dutch ambassadors.

Taylor said the "damage is being done to WTO prospects, to (the) investment climate, not just in the food sector."

Ukraine, once known as the breadbasket of the Soviet Union, is the world's sixth largest grain exporter.

In September, Ukraine's government put limits on how much wheat could be exported. A court has frozen the export limits, but authorities continue to defend the restrictions, saying they must ensure the country has enough wheat to supply Ukrainians with bread. Rising bread prices in the past have sparked strong public protests in Ukraine.

The Agriculture Ministry forecast wheat yield this year at 14.4 million tons, compared to 18.7 million tons in 2005. Bad harvests have been reported worldwide, increasing demand for wheat.

The ambassadors argued, however, that credible estimates indicated Ukraine's wheat harvest this year was in line with normal historical averages and was nothing to be concerned about. They also said it was unclear how much grain the State Grain reserve currently has in storage.

Additionally, the diplomats complained that the restrictions were not enacted in a transparent manner.

"In fact, we are talking about the cessation of grain exports from this country," German Ambassador Reinhard Schafers said.

The ambassadors said that grain traders from their countries had invested nearly US$1 billion (790 million euros) in the Ukrainian economy and were now facing losses in excess of hundreds of millions of dollars (euros).


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