May 28, 2012

 

Ukraine's 2012-13 corn output may grow 5.3%

 

 

In the next marketing year that starts October 1, Ukraine is heading for another bumper harvest of corn and output may rise 5.3% to 24 million tonnes, the International Grains Council said Friday (May 25).

 

Exports are likely to be unchanged in 2012-13 around this year's projected record level of 14 million tonnes, IGC said. Ukraine's corn exports were around five million tonnes in 2010-11, it said.

 

Ukraine is now on the verge of slipping past Argentina as the world's second largest corn exporter after the US. Due to drought-hit output, Argentina's corn exports in the current marketing year that started March 1 may fall 20% to 12.5 million tonnes, IGC said.

 

Ukraine's emergence as a major corn exporter is cited by analysts as the single most important factor that dragged down corn prices after they hit a record in June last year.

 

Until a few years ago, Ukraine was a relatively small player in the global corn trade but tight supply in the US, the world's top exporter, and expansion of local plantings, pushed up exports in a big way.

 

As China turned a major importer from a net exporter three years ago and snapped up cargoes from the US, other buyers turned to Ukraine to meet their needs.

 

Japan, world's largest corn importer, purchased at least 1.5 million tonnes of feed-grade corn for January-March shipment--almost half of its needs--from Europe to cut costs amid higher US prices. Traders say most of this European corn was shipped to Japan from Ukraine.

 

In Ukraine, corn planting was almost complete by mid-May, IGC said. Due to rising demand and good profitability, usable area has increased sharply in recent years, rising from 1.1 million hectares in 2001-02 to an estimated 3.5 million tonnes in 2011-12.

 

Reflecting solid export demand and the replanting of some frost-damaged winter grains, this year's corn acreage is forecast to increase 31%, to around 4.6 million hectares. Yields are projected to be lower than last year's record, but still above average, IGC said.

 

Many growers who were earlier planning to grow wheat, are now increasingly turning to corn in Ukraine, said a Singapore-based regional head of a global grains trading company in Singapore.

 

Due to dry weather, Ukraine's wheat output is likely to shrink by around a third to 14 million tonnes in the marketing year that begins July 1 and will drag down exports by 19% to four million tonnes, IGC said.

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