October 6, 2008
Ukraine wheat, barley exports rise
Exports of Ukraine's wheat and barley continue with large volumes each month, as prices continue a downward trend, according to a US Department of Agriculture attache report posted Friday (October 3) on the Foreign Agricultural Services Web site.
The Government of Ukraine (GOU) signed Decree 825 dated September 10, which gives the GOU the right to control wheat, barley and corn prices on the market. This decree doesn't establish the level of the price but it could be done by another decree at any moment, if the GOU decides that the current market price is too low. The action would be undertaken by the state owned Agrarian Fund which is buying grains and is financed by the GOU. As of September 11, the Fund bought 484,000 tonnes of grains out of a planned 844,000 tonnes of grain to be purchased.
The difference between Agrarian Fund and traders' prices is US$22 for wheat 3rd class, US$10 for wheat 4th class and US$30 for wheat 5th class.
The biggest price difference is for 5th class wheat and feed wheat (6th class). Feed wheat's share is normally about 35-40 percent of the crop. This year feed wheat's share is about 50 percent of the crop because of weather conditions in spring. This amount of feed wheat explains why feed wheat prices took a drop almost two times the price compared to last year. When the GOU discusses low prices they are primarily referring to feed wheat prices.
According to the State Statistic Committee, as of September 1, wheat production amounts to 26.8 million tonnes and barley production is 13.4 million tonnes. Corn harvesting is going on with delay because of the rainy weather. It was harvested 0.7 million tonnes from the area of 178, 000 hectares with yield of 3.91 tonne per hectare, as of September 29.
Sowing of winter crops is underway with substantial delays compared to last year. As of September 29, two million hectares of wheat were sown, compared to last year when 3 million hectares were already sown on the same date. Winter rapeseed sown area is almost the same as last year at 1.126 million hectares compared to 1.22 million hectares last year.
Prices for all major grains are decreasing due to high production and supply from farmers. Trading companies are slowing down their purchases due to expectations that the price could continue to go down.
Official Ukrainian statistics show grain exports in August 2008 totalled: wheat at 876,000 tonnes, barley at 966,000 tonnes and corn at 159,000 tonnes. According to information from the ports grain exports in September 2008 totalled: wheat at 990,000 tonnes and barley at 640,000 tonnes. The numbers from the ports are usually 10 to 15 percent lower then final official from statistics, because port information does not include exports by railways.
