November 12, 2011
Ukraine eyes largercorn, feed wheat exports
Ukraine's recordharvest this year should leave the country with around10-12 million tonnes of corn and seven million tonnesof feed wheat available for export, posing strong competition to US in theinternational market.
Ukrainian farmers are using inputs like fertiliser more aggressively to increase yields, according to Cary Sifferath, USGrains Council (USGC) regional director. Capital spending on port facilities and export capacity is also increasing as multi-national exporters invest in the region. â€¨â€¨
But he warned that rail and export facilities could still prove a bottleneck for moving such grain volumes.â€¨â€¨
"It wasn't that long ago the multi-national grain companies were wondering if Ukraine was a safe place to invest in facilities, since the government can restrict exports, as it did in 2010," he explained.â€¨â€¨
In October, Ukrainian President Viktor Yanukovich cancelled export duties for wheat and corn that had been imposed in July, and Ukrainian officials have talked of exporting 27 million tonnes of grain in 2011-12.â€¨â€¨
Much of Ukraine's corn and feed wheat is likely to go to the Mediterranean region, to Israel, Syria, as well as the North African and EU markets,Sifferath suggested.
"Israel has been a big feed wheat user in the past and is likely to be a big buyer because of low transportation costs from the Black Sea."â€¨â€¨
"Egypt, Algeria and Morocco are restricted from importing wheat for feed use, and sales to the EU's Mediterranean nations will depend on pricing."â€¨â€¨
"We know the Japanese and Taiwanese have purchased some Ukrainian corn," Sifferath said, adding that Ukrainian feed wheat may have traded into Southeast Asia.
He noted that feed wheat could also go to South Korea and even China, if the Chinese choose to buy wheat instead of corn to build their grain reserves.
There has also been speculation about yellow corn sales to South Africa.