June 11, 2008

Ukraine incurs US$2.5 billion loss due to grain export restrictions

Ukraine farmers have incurred a loss of around US$2.5 billion in the 2007/2008 marketing year due to quotas on grain exports, the World Bank reported.

The country has just lifted the grain export quotas on May 21; while sunflower seed oil quotas were lifted on May 30.

However, agricultural producers said that apart from financial damage, last year's quotas could bring negative consequences on the grain market in the next marketing year.

Volodymyr Klymenko, director general of the Ukrainian Grain Association, said that there could be a shortage of elevator capacities for grain from the new harvest.

According to the International Grains Council, world grain production will grow by 38 million tonnes to 1.712 billion tonnes in 2008-2009.

The forecast placed Ukraine's grain production at around 8.7 million tonnes.