Ukraine won’t impose grain export limits in ’10/11

An expected fall in Ukraine’s grain harvest in 2010 will not lead to export restrictions, the government said, but analysts forecast a sharp decrease in shipments of two leading Ukrainian cereals – wheat and barley,reported “Kazakh-Zerno” NA with reference to the “ForexYard“.

Agriculture Minister Mykola Prysyazhnyuk said on Wednesday any limits would damage Ukraine’s image as the world’s leading grain exporter and that the government would try to fill demand in the domestic market by making large state purchases.

“We will not impose export restrictions,” Prysyazhnyuk told reporters. “Taking into account that local prices are rising, we will propose to increase our purchase prices.”

Severe winter frosts followed by record high summer heat have destroyed crops on some 700,000 hectares sown with barley and wheat, and analysts say it could reduce barley yields to 2.28 tonnes per hectare from 2.35 tonnes in 2009.

They said wheat yields were likely to fall to 2.89 tonnes per hectare in 2010 from 3.15 tonnes in 2009.

UkrAgroConsult, an agriculture consultancy, has said the wheat crop could fall to 18.65 million tonnes from 19.13 million in 2009 and that poor weather cut the share of milling wheat to 25-30 percent this year from about 40-45 percent in 2009.

According to the consultancy’s calculations, the milling wheat harvest could total about 6 million tonnes in 2010, which is just about as much as Ukraine consumes domestically. The absence of a milling wheat surplus this year has triggered market speculation the government could impose export restrictions this season.

Ukraine restricted grain exports in the 2007/08 season when its wheat output dropped to 13.7 million tonnes after ice killed crops on more than a million hectares. The government said at the time the limits would ensure the population had enough bread.

This time, Prysyazhnyuk said, the government planned to buy up to 5 million tonnes of grain in stocks to prevent any food shortage in 2010/11. Ukraine had in stocks 4.9 million tonnes of grain, including 2.5 million of wheat, as of July 1.


Ukraine consumes about 26 million tonnes of grain per season, and official grain balances would allow the country to export 16 million tonnes of grain this season.

Analysts see exports at about 18 million tonnes but say maize will dominate that volume.

Volodymyr Lapa, an analyst for the Ukrainian Agribusiness Club, said maize exports could rise to 6.8 million tonnes in 2010/11 from 5.3 million in 2009/10, while wheat sales could fall to 6.7 million tonnes from 9.2 million.

Ukraine is also likely to cut barley exports to 4.8 million tonnes from 6.2 million in 2009/10.

“There are no grounds to impose export limits,” Lapa said.

Mykola Vernitsky from ProAgro consultancy said Ukraine would be able to export up to 18 million tonnes of grain, including about 7 million of wheat. But he said the share of milling wheat in exports could fall.

“We can forecast the export of a maximum of 3 million tonnes of milling wheat this season,” Vernitsky said, adding that a fall in Russian wheat harvest and exports due to drought would increase demands for Ukrainian wheat.

He said a recent rise in local grain prices was caused by a panic after reports of a drought in Russia and rains in Europe, which could cut harvests.

“Grain prices will fall in August after harvesting as there is no real base for such a sharp rise”, Vernitsky said. 

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