May 19, 2008

Ukraine may ease limits on grain exports

Ukrainian President Viktor Yushchenko is seen to cancel grain and sunflower oil export restrictions if the government fails to abolish them, a local newspaper said on Friday (May 16).

Yushchenko has asked the government to remove all limits on grain and sunoil export which have already caused losses of about US$1.4 billion on the sector.

Under Ukraine's constitution, the president is empowered to overturn government resolutions.

Ukraine, a leading European food producer, has banned grain exports in the second half of 2007 and introduced export quotas for the second part of the current season.

Grain exports fell to about 2 million tonnes so far this season compared with a total of 10 million in 2006/07.

The government has also restricted sunflower oil exports until July 1, 2008. At least 12 sunflower oil plants have suspended production and sunoil exports fell to a nine-year low of 13,580 tonnes in April from 127,000 in March.

Meanwhile, a senior agriculture official sees Ukraine's grain exports to jump to 13.5 million tonnes in the 2008/09 season, including 8.7 million of wheat.

Agriculture minister Yaroslav Gadzalo confirmed that the 2008 grain crop was expected at about 40 million tonnes against 29.3 million in 2007.

Analysts have forecast exports at 13 million tonnes in 2008/09.