September 8, 2010

Analyst cuts Ukraine's 2010-2011 grain exports forecast

UkrAgroConsult agriculture consultancy cut its Ukrainian grain exports forecast, Tuesday (Sept 6), from the previous 19.77 million to 16.73 million tonnes for the 2010/11 season.

UkrAgroConsult said it had reduced Ukraine's wheat export outlook to 5.95 million tonnes from 7.1 million tonnes. The barley export forecast was cut to 3.8 million tonnes from 5.0 million, whereas the corn shipments were reduced from 7.35 million to 6.7 million.

The consultancy said the fall in the 2010 grain crop was the main reason for smaller exports in 2010/11. Last week, UkrAgroConsult cut its Ukraine's grain crop forecast for 2010 by 7.1% to 40.4 million tonnes from 43.5 million tonnes a month earlier.

The government has said the grain crop is likely to total up to 41 million tonnes compared with 46 million tonnes in 2009. It said severe frosts in winter and record heat in July-August were the main reasons for the decrease in output.

UkrAgroConsult said Ukraine was likely to harvest 17.5 million tonnes of wheat in clean weight, 9.0 million tonnes of barley and 11.7 million tonnes of wheat in 2010.

"According to the latest information on early grain harvest, Ukrainian farmers have gathered 17.9 million tonnes of wheat and 9.2 million of barley *(bunker weight). However we should be take into account that this statistic is based for grain in raw weight. In other words, the grain weight will decrease by 3-4% after finishing," the consultancy said.

Ukrainian government last month proposed limiting exports of the two key commodities, wheat and barley, to 2.5 million tonnes between September and December but has put off the final decision until October.

But traders say the government does not need quotas because the customs service is already doing the work of the government by checks, which have brought grain shipments to a standstill in Black Sea and Azov Sea ports.

"The prospect of Ukrainian wheat blocked in ports remains the key issue troubling the agricultural community. At the moment, about 1.0 million tonnes of wheat cannot be exported. This situation troubles not only exporters, who are losing money, but also farmers, who understand that they could have had even higher profits," said UkrAgropConsult.