December 27, 2011

Ukraine's grain producers to get US$1.7 billion minimum income

During July-December 2011, the exports of Ukrainian grain, is projected to be at least nine million tonnes, which is much more than in July-December 2010 (6.9 million tonnes).

The increase is due to the abolition of export duties. The removed restrictions allowed to speed up the pace of shipments and somewhat raised the value of the grain sold by farmers. This was reported by a senior analyst with Dragon Capital Tamara Levchenko.

"With an average purchase price for grain from producers, EXW at US$190 per one tonne, the removed volume allows the sector to expect at end-2011 a revenue of at least US$1.7 billion," the expert emphasised.

According to her, July-December 2010 brought the agricultural sector a more modest grain revenue - US$1.25 billion. The then purchase price of grain (approximately US$180 per tonne), as well as quotas have led, according to estimates of relevant organisations, to the loss of UAH10 billion (US$1.25 billion) in the potential revenue of agribusiness.

This year, starting late October, nothing but a less favorable market conditions prevented farmers from sending grain for exports, and the pace of shipments clearly indicate this. In July-November 2011 exports of grain amounted to 6.9 million tonnes, exceeding last year's volume by 26%. According to Levchenko, in December (as of December 19) 1.3 million tonnes of grain have been exported. Total exports in December may reach two million tonnes, of which at least 1.5 million tonnes will be corn supplies.