October 12, 2011

 

Ukrainian grain exports to be back on track

Ukraine's termination of grain export duties will put shipments back on track if President Viktor Yanukovych does not delay in signing off the plans.

 

The country has enough time left in 2011-12 to rebuild its pace of exports sufficient to reach nine million tonnes of wheat and 12.5 million tonnes of corn over the full year, Pierre Begoc, executive director at Agritel's Kiev office, said.

 

"That's optimistic, the upper side of the range, but it is possible," Begoc told.

 

At these estimates, Ukraine's wheat shipments would meet the USDA's forecast and, for corn, exceed an estimate of 10 million tonnes.

 

Ukraine's parliament, as it on Friday voted to scrap export levies on grains except barley, pegged wheat and corn shipments combined at 20.2 million tonnes in the 2011-12 season, which began at the start of July.

 

However, for shipments to fulfil their potential requires Mr Yanukovych signing off soon on parliament's decree to ditch the duties.

 

The legislation proposes the scrapping of the tariffs at the time of presidential approval, while some speculation in Ukraine that the levies' removal will not be enacted until July next year.

 

"Usually president's approval only takes a couple of weeks," Begoc said.

 

Further delays risk reducing Ukraine's ability to play catch-up on grain exports in part because of limits to port capacity, which can handle at most 2.5-2.7 million tonnes a month.

 

However, Begoc also highlighted the threat posed by the onset of winter to the country's logistics, with Kiev expected this weekend to see its first frosts of the season.

 

"If there is snow coming, you will not be able to drive trucks around the country so freely.

 

"Winter is not always the best time to transport grains in the former Soviet Union, in what can be very difficult conditions.

 

"If Ukraine wants to achieve a high level of grain exports, the president needs to sign off right away."