June 20, 2008

Ukraine allocates US$100 million to purchase grains for reserve

Reacting to high grain prices worldwide, the Ukrainian government is preparing alterations to the 2008 state budget which will provide for the allocation of an extra US$100 million for the state grain reserve to buy grain, the government said.

Prime Minister Yulia Timoshenko has ordered the heads of regional administration to purchase grain for regional reserves equivalent to three months of consumption.

The state reserve has already bought 60,000 tonnes of grain from farmers under forward contracts and plans to purchase in the 2008-2009 marketing year a total of 1.186 million tonnes of milling wheat and 55,000 tonnes of rye.

In the 2007-2008 marketing year grain purchases by the state reserve totaled 428,500 tonnes.

Ukraine's grain harvest in 2007 dropped 5 million tonnes, falling to 29.3 million tonnes from 34.3 million tonnes in 2006.

The drop prompted the government to impose export restrictions.

The agriculture ministry forecasts this year's Ukraine's grain harvest at 40 million tonnes, comprising 19.1 million tonnes of wheat, 9.0 million tonnes of barley and 9.1 million tonnes of corn.