August 11, 2010

Kernel forecasts grain production decrease by 16%

Ukraine's Kernel, one of the largest operators of sunflower oil and grain exporters, has announced the decrease of wheat, barley, and rapeseed production by 16% against last year indices.

Despite high air temperatures in July, Ukraine, unlike Kazakhstan and Russia, does not suffer from droughts and heat a lot. That is why, the general production of wheat, barley and rapeseed suffered less, and Kernel expects that the production volume decrease will total nearly 16% compared to the last year indices, as opposed to 25-30% of grain production reduction which was forecasted for Russia.

Kernel also expects that in the current year, wheat production in Ukraine will total 18 million tonnes, down 13.9% compared with 2009, when the country harvested 20.9 million tonnes. The country will harvest over 9.5 million tonnes of barley, down 19.5% compared to 2009 (11.8 million tonnes). Without taking into account carry-over stocks, according to the forecast, both crops export volumes should total nearly 10 million tonnes, down 34% compared to the general volume of exported wheat and barley volumes of the harvest-2009 or 15.2 million tonnes.

The announcement also reminded that during recent days, air temperature indices increased converging to the level of 40°С. During the period of Septemb-October, the country will have to provide harvesting works of three important crops: sunflower, soy and corn.

To date, heat wave will possibly bring the negative impact on corn production, and the forecast of the USDA, which totalled 13 million tonnes (USDA, July 2010), may essentially decrease.

Generally, the company noticed that grain production forecast, specifically corn, wheat and barley at the present moment depends on corn production volumes, which will be completely known in one month.