November 17, 2011

Ukrainian wheat still faces quality concerns

Ukrainian wheat exports this year, still faces lingering quality concerns, according to market participants.

"Although Egypt's state grains buying agency has approved Ukraine back to their supply list, quality issues still will be the main concern for our exports this year," Svetlana Sinkovskaya, head of marketing at Ukrainian analysis body APK Inform said.

Egypt's General Authority for Supply Commodities, or GASC, bought 60,000 tonnes of Ukrainian wheat at the start of November, marking the second time it had bought Ukrainian wheat since suspending imports from the eastern European nation in 2008 over quality concerns.

"GASC recently purchased Ukrainian wheat in a tender, but the wheat is yet to arrive at Egypt's ports. If there are problems with the wheat, this will be terrible for Ukraine," said Victoria Golubyatnirova, sales and business development manager at grains inspection company SGS.

Still, APK's Sinkovskaya said Ukraine should become more active in the wheat market in February as Russia pulls back exports.

"Russia has already sold its best grain in very high volumes," Sinkovskaya said. "It is likely as well the government will place duties on exports."

Higher grain production, weaker export competition and strong foreign demand has seen Russian grain exports soar during the first three months of the 2011-12 marketing year, the USDA said last week.