October 14, 2010

Ukrainian Grain Association seeks wheat quota export raise

The Ukrainian Grain Association (UGA) called on the government Wednesday (Oct 13) to cancel plans to limit corn exports, and increase proposed quotas on wheat and barley exports.

In an open letter to Prime Minister Mykola Azarov, the UGA, which represents 80% of Ukrainian grain exporters, suggested wheat exports be limited to 1.2 million tonnes, and barley to 0.75 million tonnes, with no cap on corn.

A draft government resolution published by the Economy Ministry Monday (Oct 11) suggested limits of 2.7 million tonnes on total grain exports, including wheat at 500,000 tonnes, barley at 200,000 tonnes, and corn at two million tonnes.

The government is yet to make a final decision on the size of the quotas, which it says are needed to preserve food security.

"Considering the balance of export volumes, consumption and production of grain in Ukraine, the introduction of quotas on the export of grain is inappropriate. It will lead to significant losses for producers and grain exporters and a violation by them of contractual commitments to foreign partners," the UGA said.

The UGA also said that curbing imports would be against the rules of the WTO, of which Ukraine is a member.

"The level [we suggest] would minimise the losses of producers and export and allow the situation on the domestic market to partially stabilise," the UGA added.

Ukraine's grain harvest was hit hard by a summer drought. The Agriculture Ministry in September revised its forecast down to 38.6 million tonnes from 46.1 million tonnes last year.