May 23, 2011

Ukraine grain prices may fall after imposition of export duties

Following the acceptance of the law on export duties for grains by the Verkhovna Rada of Ukraine, the market will possibly face a reduction in grain prices, especially for corn, said representatives from Ukrainian grain trading companies.

The imposition of customs duties may lead to the grain business becoming unprofitable, said trading representatives. However, taking into account the ratio of current prices for grains and the customs duties, it is possible that the export trade may eventually turn out to be profitable.

One of the factors that influenced the reduction in grain prices is the globally low interest on Ukrainian grains. With Russia's closure of grain exports, Ukraine now has the chances to make profit in this segment of trade.

Grain trading companies are waiting for announcements of further developments. These companies are hoping for the cancellation of export quotas for wheat, which will free grain elevator capacities for the new harvest.