April 21, 2011
 

Ukrainian wheat exports recovery may not be as strong

 

 

Ukrainian wheat exports in 2011-12 might not recover with the gusto which some observers are expecting due to persistent bad weather and the effects of financial hardship on cultivators.

 

USDA attaches in Kiev pegged Ukraine's wheat exports at nine million tonnes next season, on the assumption that the country will lift the quotas which have limited shipments since last year's drought-affected harvest.

 

Although this year's 3.5 million tonnes is a large increase, it remains below pre-drought highs, and UkrAgroConsult believes that Ukraine will export 11 million tonnes.

 

The attaches' figure reflects in part a lower estimate for the crop making it to harvest after many important farming areas received less than half than normal rainfalls.

 

"Thus, topsoil moisture may be very unstable this spring," they said in a report.

 

"Considering this factor, it is expected that some crops will be resuming vegetation in less-than-favourable conditions, and this may affect plant spring development and consequently, have an impact on the final harvest figures."

 

Furthermore, crops looked set to receive only limited help from nutrients and pesticides, as farmers whose yields were depressed by last year's weather scrimped on inputs as they face restrictions in selling their grain at international prices.

 

"Slow economic recovery from the financial crisis of 2008, limited lending resources along with lower-than-anticipated profits from the previous year's sales of harvested crop and limited use of advanced technologies would constrain the harvest," the briefing said.

 

The attaches highlighted that their estimated yield figure of three tonnes per hectare was not the most optimistic forecast.
 

UkrAgroConsult has actually forecast the yield only marginally higher, at 3.05 tonnes per hectare.

 

The prospects for the return of Black Sea agricultural giants, known for fighting fiercely on price, to full-scale grain exports represents a growing consideration in the market, with rumours last week which had since downplayed an imminent Russian resumption prompting weakness in Chicago prices.

 

The attaches remained relatively downbeat on hopes for Ukraine's barley and corn exports too due to growing demand from domestic livestock producers.

 

"Growing domestic poultry production which uses corn as a major feed ingredient creates growing demand for this crop," their report said.

 

"In addition, hog production is beginning to develop on the industrial level."

 

Import delays, which meant that about 80% of all seeds intended for import and for planting in spring 2011 were not inside the country as of March, had also cut hopes for an improvement in corn yields.