August 22, 2011

 

Bumper wheat exports awaited from Ukraine, Russia 

 

 

Top wheat exporters in the Black Sea region, Ukraine and Russia, are both anticipated to produce bumper wheat shipments in the global market, which could soar to 25-30 million tonnes in 2011/12, analysts said.

 

Ukraine, which exported about four million tonnes of wheat in 2010/11, plans to boost exports to 9.7 million in 2011/12. Russia analysts expect it to export over 20 million tonnes of wheat this season, up from 3.4 million shipped in 2010/11 before the government banned exports from mid-August 2010 to July 1 due to a severe drought.

 

Analysts say favourable weather has helped the two states harvest bumper crops and keep prices at a level that allows them to take over markets in the Middle East and North Africa from European and other competitors.

 

Ukraine's Farm Ministry said on Friday (Aug 19) farms had harvested 34.1 million tonnes of grain bunker weight as of August 18, including 23.1 million of wheat. Wheat was harvested from 99.6% of the sown area.

 

The wheat yield averaged 3.47 tonnes per hectare against 2.84 tonnes at the same date in 2010.

 

Russia, where the harvest is only about 40% complete, reaped 51.4 million tonnes of grain by bunker weight by August 17, including 34.3 million tonnes of wheat. Average grain yields rose to 2.79 tonnes per hectare from 2.10 a year ago.

 

Hydrometcentre weather forecasting service said Russia could increase the grain harvest to more than 90 million tonnes in 2011 from last year's drought-hit crop of 61 million.

 

Russian think-tank the Institute for Agricultural Market Studies (IKAR) has said it expects the wheat crop this year to be 57 million tonnes, compared with 41.5 million in 2010 and 61.7 million in 2009.

 

The country's Agriculture Ministry has not provided an official wheat crop forecast for 2011 so far.

 

Russian officials say the quality of the crop is not yet clear, while traders have speculated it may be lower than earlier expected due to rains in early summer.

 

But in the neighbouring Ukraine the Farm Ministry improved its forecast of the quality of wheat.

 

The ministry said the share of milling wheat in the 2011 wheat harvest had reached 70% as of August 18 compared with about 60% a month earlier.

 

The ministry gave no explanation for the change in the grain quality. But analysts, weather forecasters and traders have said the share of food wheat was much smaller as poor weather during the harvesting affected the quality.

 

"The aim (of the ministry) is to lower domestic wheat prices, allowing state companies to buy more grain in reserves," said analyst Mykola Vernytsky from ProAgro consultancy.

 

"It is too early to talk about quality, but the share of milling wheat is unlikely to exceed 50%."

 

Robert Brovdi, director of Ukrainian grain trader HlibInvestbud, told Reuters this month that feed wheat would make up 60-65% of the total wheat harvest in 2011 compared with 40-45% in 2010.

 

High domestic prices are likely to limit Ukraine's exports, while Russia, having accumulated huge stocks from the last season and now forecasting a bumper crop, dominates the shipments from the region.