August 31, 2010
Drought threatens Ukraine's corn production
Drought has cost Ukraine its hopes of its best corn production since the 1980s, with the crop set to decrease on-year despite a jump in sowings, the head of agribusiness giant Kernel has warned.
Andrey Verevskyy, the chairman of the sunflowers-to-silos group, said that there was little doubt that the corn crop in Ukraine had suffered from the recent heatwave.
"Out forecast for corn production this year is, therefore, at best 10 million tonnes," Verevskyy said. The estimate is lower than the latest, reduced, estimate of 11.5 million tonnes from the USDA, whose data set the global benchmark.
UkrAgroConsult, the Kiev-based analysis group, two weeks ago pegged the harvest at 11.7 million tonnes. While early-planted corn was in "excellent" condition, overall moisture shortages and heat during the grain-filling period contributed to premature ripening of corn, UkrAgroConsult analysts said.
"Cobs are insufficiently filled and have incomplete grain content," they added, citing dry weather which in Kirovohrad, in central Ukraine, had created large soil cracks.
Kernel said that it was sticking by a forecast of 17 million tonnes of wheat, with the barley crop estimated at nine million tonnes, in line with UkrAgroConsult's latest forecast, and the rapeseed harvest at 1.5 million tonnes.
Verevskyy added that Kernel was slashing it estimate for grain exports for its 2011 year, which started last month, by 44% to 1.3 million tonnes thanks to the export quotas which Ukraine is widely expected to introduce, despite twice postponing a decision.
"We, as one of the largest grain market exporters, always prefer free market practices," he said, while forecasting that the restrictions would, in depressing domestic grain prices, increase the margins on the crop it does sell abroad at strong international values.
Such a margin increase would more than compensate for the shortfall in grain volumes handled and exported, Verevskyy said.
