Ukraine agrees $3bn loan-for-corn deal Ukraine is set to sign an unusual loan-for-crops contract with China that will see Kiev access $3bn in credit lines in exchange for supplies of corn, a commodity that Beijing has started to import in large quantities. The deal expands into food the scheme that Beijing has used to secure energy supplies through so-called oil-for-loans deals with countries such as Venezuela, and comes amid concerns about global food security. Mykola Prysyazhnyuk, Ukraine agriculture minister, said in an interview that the deal with the Export-Import Bank of China would be signed in mid October. "China is asking for about 3m tonnes of corn each year ... to be supplied at market prices that are set at the time of export," Mr Prysyazhnyuk told the Financial Times. The deal between Kiev and Beijing comes as China has rapidly become the world's fifth largest importer of corn. The country will buy overseas about 8.3m tonnes of the commodity between 2011 and 2013, or as much as it imported in the previous 15 years combined, according to estimates from the US Department of Agriculture. Corn is a key feedmeal to fatten cows, sheep and pigs as consumption of meat in China continues to grow, analysts said. This market is important and attractive for us. We have not yet exported crop there," Mr Prysyazhnyuk said. Ukraine, already one of the world's largest exporters of wheat and corn, is betting that a new relationship with China will open up access to a huge market, boosting agriculture investments. Corn prices hit an all-time high last month due to the impact of the worst drought in 50 years in the US, the largest producer. France has called the first ever emergency meeting next month of a new G20-backed group to discuss shortages in global agricultural markets. The Ukraine-China loan-for-crop deal is likely to raise concerns among other big importers of agricultural commodities in Asia, including Japan and South Korea. Mr Prysyazhnyuk said the Chinese loans will be used to finance the purchase of Chinese agriculture technologies, herbicides and pesticides. We will use these investments to boost our harvest and, in turn, fulfil export obligations to China. China in the past has bought corn from the US and Brazil through international agricultural trading houses such as Cargill and Louis Dreyfus Commodities. Last year Beijing imported 5.3m tonnes of corn, the most since at least 1960. Beijing has used its financial firepower over the past five years to secure supplies of commodities, particularly crude oil, offering Russia, Brazil, Ecuador and others repayment of multibillion dollars loans with raw materials rather than money. Venezuela, for example, ships at least 100,000 barrels a day of crude oil, or five per cent of its production, to repay $4bn from the Chinese Development Bank. Ukrainian officials have in recent months revealed that discussions are also under way to land billions of dollars in additional loans from China in return for help with energy modernisation as part of a new "strategic" partnership. China's Embassy in Kiev declined to discuss the corn and energy deals. For Kiev, the deal with China forms part of an effort to restore its credibility in global agricultural markets after it alienated buyers in 2010-11 by restricting grain exports due to a bad crop. Mr Prysyazhnyuk said the country was unlikely to restrict exports now, pointing to an expected 46-47m tonnes grain harvest, more than recent forecasts. Ukraine is expected to harvest more than 20m tonnes of corn this year, and could export more than half of it.