June 7, 2011

 

Ukraine forecasts grain exports at 20 million tonnes

 

 

The Ukrainian Agrarian Confederation (UAC) foresees its grain exports to reach 20 million or 21 million tonnes for the 2011/2012 marketing year (July 2011 through June 2012), according to UAC director-general, Serhii Stoyanov.

 

"I expect a moderate optimistic whole yield of grain for this year at 45-46 million tonnes, which means relevant exports forecast at 20-21 million tonnes," he said.

 

According to him, what concerns the corn harvest is the 3.4 million hectares sown at the average yield of 45 centners per hectare that will give a harvest of 15 million tonnes.

 

Moreover, Stoyanov assumed that President Viktor Yanukovych will veto the law, adopted by the Verkhovna Rada, concerning introduction of grain export duties.

 

He recalled that UAC has calculated that the introduction of duties will lead to a decline of procurement prices for grain at the home market and, correspondingly, create agribusinesses' losses of approximately UAH6 billion (US$751.6 million).

 

Stoyanov added that the agrarian sector will receive short of UAH12 billion (US$1.5 billion) due to abolition of VAT refunds to grain exporters from June 1.

 

UAC director-general noted that this farming season, the cost of growing grain crops made use of agricultural technologies that exceeded UAH5,000 (US$626) per hectare, which means prime cost of one tonne of grain makes UAH1,200-1,250 (US$150-157) at the yield of 40 centners per hectare.

 

He also said that after reprocessing and delivery to port the grain, the price will increase to UAH1,600-1,650 (US$200-207) per tonne, if there are no losses in the field-port chain, which as a rule make about 30%.

 

In his opinion, such level of prices will dissatisfy 80% of agricultural producers in Ukraine.

 

As for the price situation at the global market, Stoyanov emphasised that he ruled out sharp fall of the world prices for wheat because of Russia's intention to lift the ban on its exportation.

 

Currently, the global market is influenced by raising factors such as lowering forecasts of harvests in France and China, delays in the sowing campaign in North America, and lowering ones such as the abolition of grain export quotas by Ukraine, and also forecasts of higher harvest and exports from India and Iran.

 

Russian Prime Minister Vladimir Putin has announced his country's intention to lift the grain exports ban from July 1.

 

The Agrarian Policy and Food Ministry of Ukraine has lowered its forecast of grain exports between 10% and 21%, from two million to four million tonnes to 15-18 million tonnes 2011/2012 MY.

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