April 19, 2010

 

Russia eyes Ukrainian ports as grain export outlet

 

 

Russia wants to use Ukrainian ports on the Black Sea to ship its expanding grain stocks and is prepared to invest in upgrades to its ex-Soviet neighbour's infrastructure, the Agriculture Ministry said on Friday (April 16).

 

Russian investment in Ukrainian ports will top the agenda when Ukraine's new agriculture minister, Mykola Prysyazhnyuk, meets his Russian counterpart in Moscow on Monday, the ministry said in a statement.

 

"The key topic of the Russian-Ukrainian dialogue is expected to be shipments of Russian grain via the Ukrainian transport and logistical infrastructure and joint investment in its development," the ministry said.

 

Russia expects another bumper grain crop of 97 million tonnes this year, which Russian Agriculture Minister Yelena Skrynnik said will yield an exportable surplus of 20 million tonnes. This is in addition to 10 million tonnes of government grain stocks.

 

Russia, already among the world's largest wheat exporters, has ambitious plans to double grain exports within 15 years but is constrained by a lack of rail and port capacity. Access to Ukrainian ports would significantly enhance export potential.

 

Ukraine's deputy prime minister Viktor Slauta said that Russia aimed to build three or four grain export terminals in Ukraine, but added that simultaneous exports could create problems for both countries.

 

Ukraine has boosted grain exports in the past decade and increased the export capacity of its Black Sea ports to about 32 million tonnes per season from about 7 million in the mid-1990s.

 

The country exported 25 million tonnes of grain in the 2008-09 season and plans to export up to 22 million tonnes in 2009-10.

 

Also on Monday, Skrynnik will meet Kazakh Agriculture Minister Akylbek Kurishbayev to agree on closer cooperation in the farm sector, the Russian ministry said. It said the two countries had prepared joint supply and demand balances for meat and dairy products for this year.

 

Kazakhstan, part of a customs union with Russia and Belarus, harvested 21 million tonnes of grain last year and has introduced export subsidies, particularly for shipments via Russia, designed to help sales in a highly competitive market.