August 30, 2010

Ukraine cuts grain exports to half in July-August period

A farm ministry official said Friday (Aug 27) that Ukraine's grain exports fell to about two million tonnes in July-August, the two first months of the new 2010/11 season, from about four million on-year.

Deputy agriculture minister Evhen Lavrov told reporters that the export included 1.1 million tonnes of barley, 710,000 tonnes of wheat and some other cereals.

Ukraine exported 1.79 million tonnes of wheat and 1.57 million tonnes of barley in July-August 2009. Lavrov said a smaller grain harvest in 2010, caused by poor weather, was the main reason for the fall in exports.

The ex-Soviet republic plans to harvest 40.8 million tonnes of grain this year compared to 46 million in 2009. The wheat crop, Lavrov said, had fallen to about 17 million tonnes clean weight from 20.9 million in 2009. Lavrov said the ministry still forecast exports of 15 million tonnes of grain in 2010/11 season, including 6.1 million tonnes of wheat, 2.4 million of barley and 6.6 million of corn. Ukraine exported a total of 21.5 million tonnes of grain, including 9.2 million of wheat, 6.2 million of barley and 5.3 million of corn in 2009/10.

The government earlier this month proposed limiting exports of the two key commodities, wheat and barley, to 2.5 million tonnes between September and December following a drought in the region. That followed a ban on grain exports by giant producer Russia which led to soaring grain prices and panic buying on world markets.

But on Wednesday the Kiev government said it had put off introducing curbs on exports because the world market had settled down after Russia's export ban and the Ukrainian home market was no longer threatened by demand from abroad.

"There is no limit for exports. There are 23 ships under loading in sea ports as of today," Lavrov said.

Traders however said recently introduced additional wheat export checks in ports significantly slowed exports to a grain-hungry foreign market and cut volumes of shipments. Customs officials imposed additional quality tests for all wheat exports from Ukraine in July.

Deputy head of Ukraine's customs service, Serhiy Semka, said on Thursday (Aug 26) the service would keep up quality checks on all Ukrainian wheat export shipments and might extend them to other cereals.