July 23, 2010

Ukraine to trim grain export forecast

Ukraine is likely to cut its grain exports in the 2010/11 season to 16 million tonnes from 21.5 million in 2009/10 as a result of a smaller harvest in 2010, the presidential press service said in a statement.

"May's grain crop forecast of 46 million tonnes had been reduced by 3.5 million tonnes due to poor weather. Taking into account the new forecast, exports in 2010/11 could total 16 million tonnes," it said.

Severe winter frosts followed by record high summer heat have destroyed at least 700,000 hectares sown with barley and wheat, two Ukraine's major export commodity.

In April-May, the government had forecast the exports at 22-24 million tonnes, but in June it cut the outlook to 18-20 million, saying some regions could lose some crop due to rainstorms.

Analysts have said Ukraine could export about 18 million tonnes of grain this season, but corn would dominate the volume.

Analysts also said drought in Russia would increase foreign demand for Ukrainian grain and the government would face a tight competition with traders to buy grain in state stocks.