Business Update – Feb. 24: Reddit, honey exports and cheaper mortgages

Growth of capital investments in Ukraine dropped to 15.5% through 2019, official statistics reported by Interfax-Ukraine show. Since 2017, capital investment increases have slowed by 7%. The growth was 16.4% in 2018 and stood at 22.1% the year before, according to the State Statistics Service. 

Lifting the ban on farmland sales in Ukraine won’t help Ukraine get new loans from the International Monetary Fund, Economy Minister Timofei Milovanov has said. “It is important to know here that the main desire of the IMF is to ensure that there are either equal conditions or better conditions for small and medium-sized businesses,” Milovanov said according to UNIAN. “But there is no precondition on the land market in those agreements with the IMF.”

Ukraine’s Court of Appeals has ruled that suspended Chief of State Fiscal Service Roman Nasirov was illegally fired, but he will not be reinstated to his job. Nasirov will be compensated but the court granted his request to withdraw his claim to his job. Nasirov has been on trial for corruption since 2017, making him the highest-ranking Ukrainian official to be indicted while in office.

Amid sanitary concerns, China has announced a ban on imports of Ukrainian poultry, according to the Chinese customs office, Reuters reports. The ban also includes poultry imports from Hungary, Germany, and Slovenia as part of a nationwide sanitation crackdown amid the deadly coronavirus outbreak. China has said it detected bird flu cases in its Sichuan, Hunan, and Xinjiang provinces while cases of the disease have also recently been confirmed in Bulgaria, Hungary, Germany, Poland, Slovakia, and the Czech Republic.

State-owned PrivatBank cuts mortgage interest rates by 3-5%. All housing lending programs will be affected, the bank stated on Feb. 21. Interest rates for mortgages in the primary market were cut by 3% to 14.9% per annum, and in the secondary market, they have been cut by 5.4% to 15.5%.

PrivatBank also intends to allocate $41 million to an affordable housing lending program. The move appears to have the backing of the bank’s owners – the Ukrainian government. President Volodymyr Zelensky has said he considers it a “realistic objective” to reach reduced mortgage interest rates of 10% by September 2020. Experts agree that Ukraine’s mortgage lending market is stagnant and needs to be revived by consumer demand and stable lenders. Most homebuyers currently pay cash or enter a credit agreement with home developers.

Honey exports sweetened last year, growing by 13% according to honey market expert Valery Kureyko. In 2019, Ukraine exported 55,600 tons of honey, more than half of the estimated 110,000 tons produced last year. Ukraine is already in the global top five of honey producers and the top ten exporters. Kureyko noted that last year, Ukrainian exporters exhausted the quota for duty-free honey exports to the EU in less than two weeks. The same quotas have already been maxed out in 2020.

Ukraine has about 500,000 beekeepers, and Kureyko says that honey production will be able to maintain last year’s position under normal weather conditions. “If there are no late frosts, if there is enough moisture for lindens, and if there will be the sun for sunflowers and buckwheat in July, and if there are no weather disasters, we will collect 100,000–120,000 tons,” he said.

Ukrainian honey exports could surpass India, Spain, Mexico, and Germany in the near future, official statistics indicate. China, New Zealand and Argentina are currently the top three honey exporters, respectively. Yet the growth may be in jeopardy as some EU beekeepers and industry lobbyists are fighting to secure Brussels’ protection against honey imports, including from Ukraine.

The Dolphin offshore gas reserves in the Black Sea will be put up for tender in two lots, the state geology service announced. A previous tender won by U.S. firm Trident Acquisitions was reversed in September 2019 after officials said the process was not competitive enough and needed to be repeated.

Social website Reddit has opened an office in Kyiv to hire Ukrainian tech specialists. Giants like Viber, Google and the Amazon-owned firm Ring have already planted roots in Ukraine’s capital.

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