September 29, 2010

Ukraine to decide on grain export restrictions next week

Ukraine will decide next week whether to limit grain exports as soon as the government finishes compiling estimates of stockpiles in the country, according to Prime Minister Mykola Azarov.

"Depending on the volumes of grain, the government will decide next week whether to regulate the exports or allow them to be free," Azarov said. "We will have a confident estimation of the grain by the end of the week."

Ukraine dropped proposals last month to impose grain-export quotas, drafted with a view to controlling domestic prices after the country's harvest was cut by a two-month drought. Azarov said that the government would not limit exports because stockpiles were large enough to meet domestic demand and to be sold abroad.

In July, the customs service intensified inspections of outbound shipments, which traders said delayed deliveries and left them unable to take advantage of favorable international prices.

The Ukrainian Grain Association, representing 80% of the country's grain exporters, said that officials had delayed the departure of 24 grain-hauling vessels. At least 450,000 tonnes of grain were held up by checks, according to researchers.

The country's Agriculture Ministry has forecast a grain harvest of 38 million tonnes this year, while Deputy Agriculture Minister Yevhen Lavrov said that annual domestic consumption is about 24 million tonnes.