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IKAR in Mass Media

Ukraine Will Lift Grain-Shipment Curbs After Seven Months

07 июня 2011 года

May 25 (Bloomberg) -- Ukraine will lift grain-export curbs imposed seven months ago because of forecasts for a 15 percent increase in the harvest, potentially increasing supply as dry weather threatens crops across Europe and the U.S.

Under legislation proposed by parliament last week, export quotas will be replaced with duties. President Viktor Yanukovych, speaking in an interview in Kiev yesterday, said he plans to sign it into law. The duties may be cut in 2012, he said. The corn export quotas ended May 5.

Ukraine, once the world's biggest barley exporter, set export quotas on corn, wheat and barley in October after drought ruined crops. Russia, once the second-largest wheat exporter, banned shipments completely in August after its worst drought in at least a half century. Wheat traded in Chicago, a global benchmark, as much as doubled from June to February.

"We cannot close the grain market in Ukraine, considering world food crises," Yanukovych said. "We have to be suppliers of available grain surplus and will certainly do this."

World food prices that rose to near a record last month have added to inflation that has spurred at least two dozen central banks and the European Central Bank to raise interest rates this year. Costlier food also contributed to riots across northern Africa and the Middle East.

Ukraine will increase grain output this year by about 15 percent to 45 million metric tons, according to Agriculture Ministry estimates. The country will increase grain exports in the marketing year starting July 1 by more than 50 percent to 20 million tons from 13 million tons in the year ending June 30, Agriculture Minister Mykola Prysyazhnyuk said today.

"Positive" News

"It is positive news as it will allow supply to flow," Erin FitzPatrick, a commodities analyst at Rabobank International in London, said in a phone interview, referring to the withdrawal of quotas. Black Sea grain is "still going to be the lowest cost" and consumers "are not going to hesitate to buy it."

Ukraine's grain supplies for the season starting July 1 will be sufficient for domestic needs, Nikolay Vernitsky, an analyst at the Kiev-based agriculture researcher ProAgro, said by phone yesterday.

Wheat prices last week jumped 11 percent, the most in five months, as grain forecasts were reduced for France and Germany.

The market is volatile before a new harvest, said Oleg Sukhanov, a grains analyst at Russia's Institute for Agricultural Market Studies.

Russian Harvest

"The news from Ukraine can be bearish for the market, along with other global factors," Sukhanov said by phone from Moscow. Russia may end its ban on grain exports, depending on the size of the harvest, he added.

Russia's harvest may be between 85 million and 90 million tons, Interfax reported today, citing a preliminary estimate by the Agriculture Ministry. The national crop fell 37 percent to 60.9 million tons last year, government figures show, after the drought. The government may let the restrictions expire as scheduled on July 1 because of forecasts for a surging harvest, according to two people with direct knowledge of the discussions.

The arrival of low-cost supplies from Russia, Ukraine and Kazakhstan will be "cooling" for the market, Sukhanov said.

Source: Bloomberg  |  #grain   |  Comments: 0   Views: 42

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