China is seeking compensation of US$3 billion from Ukraine for the breach of a loans-for-grain contract signed in 2012, Russian media reported yesterday. Under the deal, the Export-Import Bank of China provided the loan to Kiev in exchange for supplies of grain. Citing a Ukrainian parliament official, the ITAR-TASS news agency reported that the State Food and Grain Corporation of Ukraine has used part of the US$3 billion Chinese loan to instead provide crops for other countries and parties, including Ethiopia, Iran, Kenya and Syrian opposition groups…Full Article: BlackSeaGrain Feb 2014

Key point

  • According to the loan contract, Ukraine must supply the grain over a 15 year period with annual exports not exceeding 6 million tons

ChinaAg Comments

  • In October 2012, it was reported that Ukraine would export ~3 million MTs of corn to China every year as compensation for a $3 million loan issued by Export-Import Bank of China
  • In June 2013, China’s Xinjiang Production and Construction Corps (XPCC) and Ukraine’s KSG Agro agreed on a US$2.6 billion deal to develop (50 year project) 3 million hectares of Ukrainian farmland

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