Ukraine seeks to accelerate grain exports

 

 

Ukraine's new farm minister will urge traders to accelerate grain exports to avert a looming glut, after forecasting on Tuesday (March 30) that the 2010 crop would match or exceed last year's 46 million tonnes.

 

Government delays in reimbursing exporters for value-added tax (VAT) are threatening to reduce shipments from Ukraine, leaving an accumulation of grain that could depress domestic prices at the start of the 2010-11 season.

 

Ukraine exported 17 million tonnes of grain in the first eight months of the 2009-10 season, while supply-demand balance suggests another 5 million tonnes could be shipped by the end of the current season on June 30.

 

But traders, concerned about the government's large VAT debt, have said 2009-10 grain exports are unlikely to exceed 20 million tonnes, compared with 25 million tonnes in 2008-09.

 

Analysts' forecast on grain stocks could rise to 4.3 million tonnes by the end of the season from 3.2 million tonnes a year earlier. UZA, the Ukrainian grain traders' union, forecasts stocks could be even higher - at least 5.0 million tonnes - and that this would reduce local prices in the first few months of the 2010-11 season, which begins on July 1.

 

UZA president Volodymyr Klymenko earlier forecast a 2010 grain crop of between 46-47 million tonnes, compared with the 46 million tonnes harvested in 2009.

 

Prysyazhnyuk earlier this month said that farmers might lose at least 10-15% of winter wheat sown to the 2010 crop due to a drought in late 2009, followed by severe frosts and ice. But on Tuesday, he said favourable weather would allow farmers to avoid large losses.

 

Winter wheat comprises about 80% of the total winter grain area and more than 90% of the total wheat harvest. Ukraine consumes about 12 million tonnes of wheat per year and harvested 20.9 million tonnes in 2009.

 

Prysyazhnyuk also said farmers had started the 2010 spring grain sowing campaign, and that high water content in the soil was creating favourable conditions for the next harvest.

 

Meanwhile, Ukrainian farms had sown 640,000 hectares to the 2010 grain harvest as of March 29, compared with 700,000 hectares by the same date in 2009.

 

Ukrainian soft milling wheat was trading at US$160-165 per tonne, free on board, Black Sea as of March 29. Feed wheat cost US$158-162 per tonne.