July 28, 2010

Ukraine may curb grain exports on reduced supply

Ukrainian government may limit food grain exports in the second half of the 2010/11 season to avoid domestic shortages in the wake of crop damage, analysts said Tuesday (Jul 27).

"We don't rule out that the government may limit grain exports, mainly milling wheat, in the second half of the current season," UkrAgroConsult said in a statement.

Ukraine's State Customs Service had imposed some additional control measures in ports which led to delays in grain exports.

These additional measures were taken by the government to protect the domestic market after the crops were damaged by bad weather and crop estimates were reduced, the consultancy said.

Traders said at least five grain vessels were held up in Ukrainian Black Sea ports due to these new measures.

Frosts and drought have destroyed about 1.0 million hectares of Ukrainian grain crops and the government said the harvest could fall to 42 million tonnes in 2010 from 46 million in 2009 and 53.3 million in 2008.

Farm Minister Mykola Prysyazhnyuk said on Tuesday the share of milling wheat in the 2010 wheat crop was likely to fall by 15% compared to the 2009 harvest and could total about 9.0 million tonnes.

He said Ukraine's stocks had also included about 2.0 million tonnes of milling wheat while the country needed a total 5.4 million tonnes of milling wheat to meet food needs.

Analysts, however, said that this year's wheat harvest could be at 18.6 million tonnes and only about 30% of wheat would be food quality.

But last week Prysyazhnyuk said that an expected fall in grain harvest in 2010 would not lead to export restrictions.