February 8, 2007

Ukraine traders dump grain into sea

Grain traders in Ukraine have been dumping thousands of tonnes of rotting crops into the Black Sea as a protectionist trade embargo in what was once the "breadbasket of Europe" extends into its fifth month.

Though the government has promised to ease export quotas on some grain categories, the market has already incurred huge losses.

Ukraine, one of the world's leading grain exporters, harvested about 34 million tonnes of grain from last season's crop, 9 percent less than the previous harvest. Analysts feel with the easing of quotas, traders would be able to boost exports from 5.5 million to 8 million tonnes.

Meanwhile, Kazakhstan and Russia have captured market from Ukraine.

Andriy Klyuyev, Ukraine's deputy prime minister told the "Financial Times" last week that export restrictions might be lifted by the end of this month.