October 22, 2007

 

Ukraine to cancel restrictions on grain exports

 

 

Ukraine, one of the world's biggest grain exporters in 2005, will cancel restrictions on grain and oilseed exports in November as prices have already reached record highs, according to the country's economic minister, Anatoly Kinakh on Friday (October 19).

 

The decision will be effective lift the limits on November 1, said Kinakh, adding the Ukrainian "government is not in favour of the restrictions."

 

Restrictions on grain exports were imposed in 2006 to avoid a domestic shortage.

 

Wheat prices reached a record of US$9.6175 a bushel on the Chicago Board of Trade (CBOT) on September 28 after adverse weather affected crops in Europe, Canada, and Australia, dragging global inventories toward a 32-year low.

 

Ukraine will export as much as 4 million tonnes of wheat of this year's harvest, Kinakh said. The country harvested 28 million tonnes of grain this year, including 14.5 million tonnes of wheat, he said.

 

The minister stressed Ukraine has a huge agricultural potential and has a good chance therefore to become one of the major players in global grain markets.

 

Farmers harvested 4.2 million tonnes of sunflower seeds in Ukraine and would produce 1.8 million tonnes of sunflower oil, of which 1.2 millions tonnes would be exported, he added.

 

Ukraine was the world's biggest barley exporter in 2006 and one of the biggest wheat shippers, according to the US Department of Agriculture.

 

Wheat exports from Ukraine fell 56 percent to 2.8 million tonnes last year from 6.5 million tonnes in 2005, after drought damaged crops, leaving less for sale outside the country. Ukraine had estimated that it would produce about 16 million tonnes of wheat this year, compared with 14 million tonnes in 2006.

 

Ukraine's currency, the hryvnia, is expected to trade between 4.95 to 5.25 per dollar through 2008, and any "artificial revaluation, like the one that took place in April 2005, would hurt exports," Kinakh said.

 

The country's trade deficit widened in the first eight months of the year as imports outpaced exports. Ukraine's exports increased 30 percent in the first eight months of the year, compared with the same period in 2006, while imports rose 33.8 percent, the statistics agency said October 11.

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