September 8, 2011

 

Ukraine to boost 2011-12 grain exports

 

 

Ukraine's Agriculture Minister Mykola Prysyazhnyuk said the country hopes to double exports to 24 million tonnes in the 2011-12 season by increasing its grain harvest to 51 million tonnes in 2011 from 39.2 million a year ago.

 

Prysyazhnyuk told Reuters that the former Soviet republic had harvested 22.2 million tonnes of wheat this year and had the capacity to ship abroad 10 million tonnes of the commodity in 2011-12, although current export restrictions were a big obstacle to this ambition.

 

Ukraine harvested 16.8 million tonnes of wheat in 2010 and exported 4.2 million in 2010-11.

 

Prysyazhnyuk forecast the harvest of 51 million tonnes and wheat totals 22.2 million tonnes clean weight. Since Ukraine do not consume much of the grains, the agriculture chief said wheat exports could total 10 million tonnes.

 

According to data provided by the Agriculture Ministry, Ukraine had already completed the 2011 wheat harvest, threshing about 23 million tonnes of wheat by bunker weight.

 

Prysyazhnyuk said a high harvest, the second largest in the past 20 years, allowed Ukraine to boost exports this season but that current grain export duties prevent a jump in shipments.

 

The Ukrainian Agrarian Confederation (UAC) this week said Ukraine's grain exports totalled 1.8 million tonnes in July-August 2011, the first two months of the new 2011/12 season, or 22 % less than in the same period in 2010.

 

The local union of traders and producers said export duties caused a fall in shipments because they made Ukrainian grain less competitive on the global market, which has seen Russian grain flood back in after a near year-long export ban following severe drought in 2010.

 

Prysyazhnyuk said the ministry saw no critical changes in September as they could export 1.5 million tonnes, a small volume yet with duties.

 

According to UkrAgroConsult agriculture consultancy, Ukraine exported 202,000 tonnes of grain in the first six days of September. The volume included 150,300 tonnes of wheat for The European Union and Syria.

 

The ministry this month asked the government to cancel the duties, introduced in July to replace last year's export quotas, instituted to protect home markets after severe drought. The government is reluctant to end grain export duties because it would lose valuable revenues.

 

Analysts and traders have said export duties, which reduce the pace of Ukrainian exports this season, could leave no room in silos for the corn harvest, which is expected to be at the record level of about 20 million tonnes.

 

With such low pace of exports we will have no room for late grains - corn, sunseed, soy, said UAC director Serhiy Stoyanov.

 

"We could lose 3 to 5 million tonnes of corn," he said, referring to an absence of proper condition for corn storage.

 

Traders have said Ukraine could store no more than 30 million tonnes of grain.

 

Ukraine, a traditional producer and exporter of wheat and barley, could dominate the regional corn market this season after it expect to ship abroad 12 million tonnes.

 

Ukraine exported 5.1 million tonnes of corn in 2010-11.

 

The export of corn could be at 12 million tonnes, said Prysyazhnyuk as it replaces barley this season. Corn is traded at the same prices as wheat, but its yield is much higher, he added.

 

Ukrainian corn costs $290-$300 per tonne FOB Black Sea, while the country exports its milling wheat at $275 per tonne FOB Black Sea.