The State Food and Grain Corporation of Ukraine (SFGCU) has announced that it is fully fulfilling its obligations under its agreement with its Chinese partners for supply of grain. The press service of the SFGCU made the announcement in a statement.

As confirmation of the normal process of cooperation with its partner in the project (China National Complete Engineering Corporation or CCEC), the Ukrainian corporation provided a screenshot of a letter from the CCEC corporation’s head to the SFGCU on January 16, 2014. However, only part of the letter was readable and the remainder was blurred out.

"So far, grain trading of our agricultural cooperation project has started smoothly and steadily and Chinese commodity trading and EPC (engineering, procurement, and construction) projects as well as other projects have been actively promoted," the letter states.

The Chinese proposed holding a quadripartite meeting involving China EximBank, the Ukrainian Ministry of Finance, the SFGCU, and CCEC to ensure smoother cooperation in 2014.

"According to available information, O. Malych, one of the advisers to former prime minister Mykola Azarov and a former chairman of the state corporation’s supervisory board who is suspected of initiating corruption schemes and malfeasance, could be involved in the organization of a smear campaign against the SFGCU,” the press service of the SFGCU said.

However, the press service did not confirm or deny the claim by Parliamentary Deputy Hennadii Moskal that the SFGCU has supplied grain worth only USD 153 million to China despite the fact that it should have supplied more. The press service also does not comment on the parliamentary deputy’s claim that tens of millions of dollars of Chinese loan was used to purchase grain for export to China, but the grain was actually exported to Monaco, Switzerland, Saudi Arabia, Kenya, and other countries. Moskal also said that China intended file a complaint at the London Court of International Arbitration  because of Ukraine’s failure to fulfill the terms of the grain contract.

As reported, Ukraine and China reached agreement on a loan of USD 3 billion from the Export-Import Bank of China in 2012. The SFGCU received the first tranche of USD 1.5 billion for purchase of grain in early 2013. Ukraine is to use the second tranche of the loan (USD 1.5 billion) for purchase of Chinese goods. The SFGCU’s First Deputy Board Chairman Robert Brovdi said that the corporation had exported 1.5 million tons of grain to China as of December 3, 2013.