June 11, 2008

Grain exports strong in Black Sea Region but infrastructure faces problems

Black Sea regional wheat and coarse grain exports are forecast to set a record 36 million tonnes in 2008/09, according to the USDA monthly "Grain: World Markets and Trade" report posted Tuesday (June 10, 2008) on the Foreign Agricultural Service Web site.

However, the transportation infrastructure inside Russia and Ukraine could present some limitations on exports from the region, as Kazakhstan also ships through these countries.

In 2002/03, Russia, Ukraine and Kazakhstan combined for a total of 33 million tonnes of exports, most of which was shipped from Black Sea ports.

Although there has been a significant amount of investment in the Black Sea port facilities, the region's interior transportation infrastructure has been only modestly improved, the report said.

Some of the limiting factors include availability of railcars during the key exporting season from July through October, quality of secondary roads, and limited storage facilities. Increased flexibility especially regarding overland flour trade and usage of Baltic ports may help these countries, particularly Kazakhstan, keep trade moving despite infrastructure shortfalls, the report noted.