July 31, 2012

Ukraine sees increased grain exports to China

As a result of the drought that has cut into US corn and wheat crops, grain dealers in Ukraine said they were seeing increased buying interest from China.

China is a major importer of grains grown in the US, but tightening supplies have turned China's attention to Ukraine, Voice of America said Saturday (July 28).

Galyna Kovtok, chief executive officer of UkrLand Farming, Ukraine's largest agri-business, told VOA her company was negotiating a US$4 billion credit with China. "This year, UkrLand Farming may become the first company in Ukraine to send agricultural products to China because at this moment, we are actively working to get certified to export to China," she said. "The first step will be corn, and then we will work on sending other goods."

China has been investing in the construction of grain elevators in Ukraine to facilitate the shipment of commodities to Asia, VOA said. UkrLand will soon have storage capacity of about two million tonnes.

Grain sales to China come at a time when Ukraine is also dealing with a shortage of rain. VOA said corn and wheat harvests in the entire Black Sea region were predicted to be 10-15% below normal.