May 23, 2008

Ukraine's grain sector holds vast export potential

Ukraine has potential grain production of 100 million tonnes and its annual grain export volume could reach 40 million tonnes, the amount it is producing currently, in the next few years, experts said on the eve of opening the Annual meeting of the European Bank for Reconstruction and Development (EBRD) Board.

Currently, Ukraine expects a harvest of 40 million tonnes of which 13 million tonnes could be exported.

Before massive exports could become a reality however, funds would need to be invested in such areas as machinery and infrastructure.

A reliable seed-growing system is also needed, according to the government. Currently, Ukraine imports 95 percent of the fertiliser it uses in agriculture.

Last year, Ukraine's grain volume amounted to 35 million tones including carry-over. At present, Ukraine only exports 1.6 million tonnees from the available volume of 4 million tonnes.

It recently imposed grain export quotas, fearing grain grain prices on the international market would trigger massive exports and result in soaring inflation at home.

However, with the next harvest approaching and farmers complaining that the country is running out of storage capacity, the government is expected to ease restrictions.

The government Wednesday (May 23, 2008) lifted quotas on wheat and barley exports. Currently, Ukraine does not impose quotas on corn.