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Enterprises of State Forest Resources Agency sell 85% of timber through UEEX

KYIV. Sept 14 (Interfax-Ukraine) – Forestry enterprises of the State Forest Resources Agency with the entry into force on July 1 of the law on the capital market (No. 738-IX on simplification of attracting investments and introduction of new financial tools) concentrated 85% of the sale of resources on the Ukrainian Energy Exchange (UEEX), Head of the State Forest Resources Agency of Ukraine Yuriy Bolokhovets has said.

"One of the exchanges [Ukrainian Energy Exchange] has already received a license and is actively trading. In a month we have reached 85% of trade through the exchange," he said in an exclusive interview with Interfax-Ukraine.

Bolokhovets added that, according to the available information, applications from several other stock exchanges are under consideration by the National Securities and Stock Market Commission.

"I am sure that this year there will be more of them. Both we and processors expect from the exchanges to create transparent and clear rules: all participants must be aware of the responsibility for non-fulfillment of the contract, there must be guarantees, mechanisms for influencing trading participants who do not comply with their obligations," the head of the State Forest Resources Agency said.

According to him, the exchanges are provided with instruments of control and influence on participants.

"If they only want to receive a fee from buyers, then this approach does not suit us. I am sure that over time, competition will also arise between the exchanges," Bolokhovets said.

He added that he expects a risk hedging mechanism to appear on the market.

The head of the State Forest Resources Agency recalled that even before the new law came into force, it was possible to concentrate 100% of timber trading on electronic platforms, including ProZorro.

According to the agency, in January-June of this year, the volume of product sales amounted to UAH 9.2 billion, which is UAH 2.8 billion, or 43%, more than the same period last year, while logging from all types of felling increased by only 2%, to 6.72 million cubic meters. Untreated timber was sold for UAH 7.2 billion, which is UAH 2.3 billion more than in the first half of 2020.

"There is a global tendency for wood to rise in price by 15-20%, but we have tripled the price for some items, thanks to competition. This means that earlier the prices for wood in Ukraine were artificially lowered. Today, over eight months of work, we have de-shadowed almost UAH 4.5 billion in favor of the state," the head of the State Forest Resources Agency said.

Speaking about the planned changes in the market, Bolokhovets also said that the agency will not create a large wholesale seller, and enlarged forestry enterprises will become the players.

"Any wholesale structure is certain monopolization, and our goal is transparent and fair competition, equal conditions for all buyers of our products," the head of the agency said.