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Ukraine's Rail Tariff Hike Sparks Concern in Agricultural Sector

Ukraine's Rail Tariff Hike Sparks Concern in Agricultural Sector
photo: Österreichische Verkehrszeitung / Public domain/Ukraine's Rail Tariff Hike Sparks Concern in Agricultural Sector
28 / 11 / 2023

Ukraine's decision to increase rail freight tariffs by 20% next year has stirred significant unease among grain producers.

According to ProAgro Information Company, the Ukrainian Grain Association (UGA) has expressed serious concerns, highlighting the potential negative impact on the already burdened logistics costs for farmers. This increase could lead to a reduction in the sown areas for the 2024 harvest, directly affecting the country's grain and oilseed exports, vital sources of foreign exchange earnings, and causing a decline in Ukrainian Railways' freight traffic and revenue, challenging the very purpose of the tariff hike.

GMK Center, a Ukrainian-based think-tank and consulting company, warns that this pattern of ongoing tariff increases to counteract falling rail cargo could lead Ukrzaliznytsia into a shaky position, affecting not just the railway company but also the broader Ukrainian economy.

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