[Keith_McClary]

China sues Ukraine for breach of US$3b loan-for-grain agreement

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.

So far, Chinese importers have only received US$153 million worth of Ukrainian grain, or 180,000 tonnes, the report said.

The report was carried by the Chinese-language service of The Voice of Russia radio. There has been no official comment from China Exim Bank on the report.

The Ukrainian parliamentary official said China has already lodged a case against Ukraine at the London Court of International Arbitration. The report did not mention the date or any further details on the case.

In March, the Worldwide News Ukraine news agency reported that the first half of the Chinese loan was delivered to Kiev, and Ukraine planned then to export four million tonnes of grain last year.

The loan contract stipulated the supply of Ukrainian grain over 15 years. The annual volume of grain exports would vary but would not exceed six million tonnes a year.

The Ukrainian parliament would provide state guarantees for the loan-for-grain contract, the report added.

China has stepped up agricultural co-operation with Ukraine in recent years. The Xinjiang Production and Construction Corps said last year it had reached an agreement with KSG Agro, a leading Ukraine agricultural company, on a 50-year programme to secure produce from three million hectares of Ukrainian farmland for Chinese consumers.

But KSG later denied it was "selling" any land to any Chinese companies, and that the agreement was a "letter of intent" concerning a transfer of irrigation technology from Xinjiang.
(entire article)

[ROCKMAN]

Very interesting Keith... the plot thickens. Given the chatter of tens of $billions of potential EU/US financial for the Ukraine I wonder how much will end up in Chinese accounts or will be used to supply China and Russia with the bread?

[Plantagenet]

The Ukraine should sign over Crimea to the Chinese in exchange for forgiveness of the 3 billion dollar loan.

It would be like France selling the Louisianna Purchase to the USA.

Once China buys the legal title to Crimea from Ukraine then it could move in some settlers, pacify the natives, and have itself a nice little piece of property there.

[ROCKMAN]

P - Unless the US and EU inject many tens of $billions into the Ukraine they would likely never recover it's easier for me to see the Ukraine become some sort of economic development zone coordinated by Russia and China. The Ukraine is more desperate than ever before for economic activity. But they had a little revenue to do so before the loss of Crimea. They've lost that stream of oil/NG as well as the lease revenue, loans and discounted NG from Russia. And with the loss of 20% of their domestic NG and a surge in Russian NG import costs I suspect there's a major concern over the viability of their steel export revenue. So they either play ball with Russia and China. It's either that or the US/EU take them on as a foster child they'd have to perpetually dump $billions into yearly. And that would just be for maintenance. I've yet to see anyone offer even a fantasy plan to make develop the Ukraine into a viable proposition.

[Keith_McClary]

I suspect there's a major concern over the viability of their steel export revenue.

Ukraine sort of stands out among industrialised countries in these tables
https://en.wikipedia.org/wiki/List_of_c ... production
exporting about 75% of their production.

The figures are based on a broad definition of the steel industry and its
products, including ingots, semi-finished products, hot-rolled and cold-
finished products, tubes, wire, and unworked castings and forgings.

I get the impression the steel market has a lot of protectionist/dumping issues.

[radon1]

Funny thing about Ukrainian metallurgy: It was the Soviet Union that helped India build metal industry decades ago within the scope of the Soviet assistance programs for India (i.e. did it for free or at a significant discount). And specifically, the engineers and workers who were sent to India to help with that were employees of the Ukrainian steel/metal factories. And then a guy called Lakshmi Mittal made his fortunes using the fruits of their work in India.

And then after the collapse of the Soviet Union he came in and participated in the "privatizations" of the Ukrainian metallurgy industry, buying the factories at knock down prices, under the guise of "a need for an effective manager".

Which is a ridicule over the common sense.

[Shaved Monkey]

For a Peak Oiler it is a logical consequens....

Also a finite ressource: Peak Soil....

There will be war for oil and yes for soil.

M_B_S

I think Im a land grabber of sorts.
Im getting a few trucks of alluvial soil delivered here.
As a PO I know I need to grow more food, but dont want to move to a place with fertile soil or have the time to grow enough fertile soil here.
As I currently can afford to pay the freight(cheap oil) and the soil(under valued resource),Im getting it delivered.
Its dredged form a river flat on private property that gets alluvial soil deposited there every year after floods,its mixed with local cow manure and mushroom compost.
Virtual topsoil just add more compost,manures,mulch,crushed volcanic rock for minerals ,charcoal, bacteria, fungi,worms and microbes.
Long term this soils carbon footprint will be reduced to zero through the food it produces locally and the carbon it captures.
Its also a investment, that will start to return positive financial returns within a few years.

[Newfie]

And, I'll bet it feels gooood!

[ROCKMAN]

keith - And along that tact it seemed that perhaps part of Russia's plan to take Crimea (and 20% of Ukraine NG supply was to gain leverage on the Ukraine steel makers. I thin I read that Russia was a major importer of Ukrainian steel and that Russian steel makers were hurting a bit as a result. So the Ukraine is more dependent upon steel exports then every before but they still need a good big of Russian cooperation. I'm not sure if that means more or less protection for Russian steel makers. Perhaps that depends on who's better friends with Putin: steel makers or steel buyers.

And a bit of the same dynamic on wheat: Ukraine exports a lot to Russia but it looks like the Chinese were trying to control a good bit of it. Ad there's the question of who gets the Chinese/Ukrainian wheat: China or do they swap it for oil from eastern Russia?