October 20, 2010

 

Ukraine to export up to 14 million tonnes grain

Ukraine will export 12-13.5 million tonnes of grain during the 2010/2011 marketing year (from July 2010 to June 2011), experts forecast.

 

"Considering the fact that the quotas that were introduced are short-term quotas that are unlikely to be extended, Ukraine will export 6.5-7 million tonnes of grain in the second half of the 2011 marketing year (from January 2011 to June 2011) and exports will reach 12-13.5 million tonnes of grain at the end of the year," said Dmytro Ushenko, an analyst at the BG Capital investment company.

 

According to experts with the Sokrat investment company, exports in 2010 will total 6.7-7.2 million tonnes and 12.8-13 million tonnes at the end of the season (considering the established quotas and the 4-4.5 million tonnes of grain that has already been exported).

 

Andrii Shokur, an analyst with the Phoenix Capital investment company, made a similar forecast. According to Shokur, the demand for grain on the domestic market is 24 million tonnes whereas the grain harvest is forecasted at 38 million tonnes.

 

"Thus, Ukraine could export 12-13 million tonnes of grain. Ukrainian farmers should be able to export about 6-7 million tonnes after the quotas are abolished," Shokur said.

 

According to Ushenko, the quota for export of 2.7 million tonnes of grain until December 31 is sufficient because demand for grain on the domestic market will come not only from traders, but also from the Agrarian Fund.

 

In addition, according to Ushenko, the introduction of quotas for export of grain is not a critically necessary measure in Ukraine, unlike the situation in Russia, because the expected reduction in the size of the grain harvest in Ukraine will not pose a threat to Ukraine's national food security.

 

Ushenko said that the quota for export of grain until the end of the calendar year was introduced with the aim of boosting the state's food reserve and reducing the volume of export of grain by grain traders.

 

Tamara Levchenko, a senior analyst at the Dragon Capital investment company, said that the only negative effect of the introduction of the grain export quota is that the mechanism for distributing the quota has not yet been determined.

 

According to Levchenko, the situation on the market will nonetheless have a negative effect on large agricultural holdings such as Mria (Ternopil region), Astarta (Kyiv), Ukrros (Kyiv), and Myronivskyi Khliboprodukt (Kyiv), but the negative effect on them will be less than the negative effect on small farmers.

 

Shokur also noted the positive effects of the grain export quota, particularly its effect on consumer prices, because bakeries and pasta producers will be able to buy grain at acceptable prices.

 

Earlier, the Cabinet of Ministers set a quota of 2,702,000 tonnes for export of grain until the end of 2010 on October 18, including quotas of 500,000 tonnes of wheat, two million tonnes of corn, 200,000 tonnes of barley, 1,000 tonnes of rye, and 1,000 tonnes of buckwheat.

 

The quota came into effect upon its publication in the Uriadovyi Kurier newspaper on October 19.