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Ukraine Parliament is dismissed
After consultations with major political forces on Wednesday, October 8, 2008, President of Ukraine Viktor Yuschenko dismissed the Ukrainian Parliament. After consultations with major political forces on Wednesday, October 8, 2008, President of Ukraine Viktor Yuschenko dismissed the Ukrainian Parliament. The appropriate TV message was broadcasted late night on October 8, 2008 and today, the decree appeared on the President’s website.
The Parliament’s dismissal followed the collapse of the coalition on Tuesday, September 2, 2008 as the faction led by the Prime Minister Yulia Tymoshenko made an alliance of convenience with the opposition Party of Regions to pass several laws limiting the President’s power. The next day, the pro-presidential Nasha Ukrayina-Narodna Samooborona (NUNS) faction announced its decision to leave the coalition.
The President’s decision to dismiss the Parliament came one month and five days after the coalition’s collapse. The President resorted to using his Constitutional right to dismiss the Parliament if the coalition is not formed within 30 days.
Bloc of Yulia Tymoshenko (BYuT) announced that it will appeal to the Constitutional Court as the President does not have a constitutional right to dismiss the Parliament until November 23, 2008, the date of the one-year anniversary of the Parliament’s first session following last year’s elections.
BYuT and part of the NUNS faction attempted to restore the coalition right until the very last day, but part of the NUNS strongly objected to this idea.
The emergency parliamentary elections are scheduled to take place on Sunday, December 7, 2008.
Our view:
We view this move by the President as political suicide. His ratings are at a record low and there is every chance that his political party will fail to pass the 3% voting threshold required to enter the Parliament.
We also consider the possibility that the Parliament may call emergency Presidential elections in response to the President’s decree given BYuT’s recently announced information about the weaponry loads possibly having been delivered to Southern Sudan and Georgia upon being signed by the President.
Please watch for our extended flash note news with the most recent update on these events, to be issued later today.
Global Sugar deficit to reach 4.7 mln mt: MIXED
According to the updated forecast of Kingsman, a UK-based consulting agency, the world sugar deficit will deepen to 4.7 mln mt (+42% YoY) in the 2008/09 marketing year. According to the updated forecast of Kingsman, a UK-based consulting agency, the world sugar deficit will deepen to 4.7 mln mt (+42% YoY) in the 2008/09 marketing year. Adverse weather conditions in Cuba and the USA have resulted in losses of approximately 300 thsd mt of potential production for each country. Moreover, Brazil’s bank liquidity crisis, combined with adverse weather conditions in southern Brazil, has negatively affected sugar production in the country.
The government of India has downgraded its forecasts for sugar production to 22 mln mt. Consequently, India has changed its status of sugar exporter to importer, which is reflected in the loss of 4 mln mt of sugar exports for the world.
Our view:
Ukraine is going to produce 1.6-1.7 mln mt of sugar in the 2008/09 marketing year. The country’s annual sugar consumption amounts approximately 2.2 mln mt. We believe Ukraine is facing a sugar deficit as well; according to our estimates, it will be between 0.58-0.6 mln mt of sugar. Nevertheless, the country will be able to cover the sugar shortage with the help of imported Australian cane sugar. We think that world sugar prices will continue to grow, dragging Ukrainian domestic sugar prices upwards. Domestic wholesale sugar prices could reach USD 600 per mt before February 2009
Bogdan will cooperate with Skoda: NEUTRAL
The Bogdan Corporation and the Skoda Transportation Company (Czech Republic) have established a joint company "Bogdan" - Skoda Transportation". The Bogdan Corporation and the Skoda Transportation Company (Czech Republic) have established a joint company "Bogdan" - Skoda Transportation". The company will sell Skoda Transportation products, such as trams, subway cars and suburban electric trains. The new company should be ready to start production of the equipment in Ukraine in 2Q2009.
The "Bogdan" - Skoda Transportation" Company intends to sell approximately 100 trams and 100 subway cars by 2010. The company will cover Ukraine and other CIS countries.
Our view:
Despite this news looking positive for Bogdan Corporation at first glance, the new company will experience strong competition from Ukrainian and Russian companies that produce the same products. One of the factors bearing against Bogdan’s success in this sphere of production is that the company has no previous experience with respect to producing this type of equipment. Another question remaining is the certification of Skoda railcars, as well as subway cars, in the CIS region, a process which may take several years.
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