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IKAR in Mass Media

Bumper Ukrainian, Russian wheat exports expected

30 августа 2011 года

KIEV/MOSCOW, Aug 19 (Reuters) - Ukraine and Russia, top wheat exporters in the Black Sea region, are ready to shake the global market with bumper wheat shipments, which could soar to 25-30 million tonnes in 2011/12, analysts said.

Ukraine, which exported about 4 million tonnes of wheat in 2010/11, plans to boost exports to 9.7 million in 2011/12. Russia analysts expect it to export over 20 million tonnes of wheat this season, up from 3.4 million shipped in 2010/11 before the government banned exports from mid-August 2010 to July 1 due to a severe drought.

Analysts say favourable weather has helped the two states harvest bumper crops and keep prices at a level that allows them to take over markets in the Middle East and North Africa from European and other competitors.

Ukraine's Farm Ministry said on Friday farms had harvested 34.1 million tonnes of grain bunker weight as of Aug. 18, including 23.1 million of wheat. Wheat was harvested from 99.6 percent of the sown area.

The wheat yield averaged 3.47 tonnes per hectare against 2.84 tonnes at the same date in 2010.

Russia, where the harvest is only about 40 percent complete, reaped 51.4 million tonnes of grain by bunker weight by Aug. 17, including 34.3 million tonnes of wheat. Average grain yields rose to 2.79 tonnes per hectare from 2.10 a year ago.

Hydrometcentre weather forecasting service said Russia could increase the grain harvest to more than 90 million tonnes in 2011 from last year's drought-hit crop of 61 million.

Russian think-tank the Institute for Agricultural Market Studies (IKAR) has said it expects the wheat crop this year to be 57 million tonnes, compared with 41.5 million in 2010 and 61.7 million in 2009.

The country's Agriculture Ministry has not provided an official wheat crop forecast for 2011 so far.

QUALITY

Russian officials say the quality of the crop is not yet clear, while traders have speculated it may be lower than earlier expected due to rains in early summer. But in the neighbouring Ukraine the Farm Ministry improved its forecast of the quality of wheat.

The ministry said the share of milling wheat in the 2011 wheat harvest had reached 70 percent as of Aug. 18 compared with about 60 percent a month earlier.

The ministry gave no explanation for the change in the grain quality. But analysts, weather forecasters and traders have said the share of food wheat was much smaller as poor weather during the harvesting affected the quality.

"The aim (of the ministry) is to lower domestic wheat prices, allowing state companies to buy more grain in reserves," said analyst Mykola Vernytsky from ProAgro consultancy.

"It is too early to talk about quality, but the share of milling wheat is unlikely to exceed 50 percent."

Robert Brovdi, director of Ukrainian grain trader HlibInvestbud, told Reuters this month that feed wheat would make up 60-65 percent of the total wheat harvest in 2011 compared with 40-45 percent in 2010.

EXPORTS

High domestic prices are likely to limit Ukraine's exports, while Russia, having accumulated huge stocks from the last season and now forecasting a bumper crop, dominates the shipments from the region.

In July after a nearly year-long export ban had expired, Russia exported 2.6 million tonnes of grain, of which 2.4 million was wheat. Turkey and Egypt were the top buyers.

Unlike in past years, exports of Russian low- and medium-quality wheat to southern Europe including Italy, Spain, Greece and Portugal rose, mainly due to lower competitiveness of Ukrainian wheat, SovEcon agricultural analysts have said.

SovEcon said that in August Russia may export 2.9 million tonnes of grain, including 2.6 million tonnes of wheat.

Ukrainian prospects are not so optimistic. Grain exports are unlikely to exceed 1.6 million tonnes in July-August, UAC industrial lobby said this week. Ukraine exported 2.1 million tonnes of grain in July-August 2010.

Ukraine exported 12.7 million tonnes of grain in the 2010/11 season, and the government has said the country could export 21-23 million tonnes this season, rebuilding its position after the previous year's crop was depleted by adverse weather.

Vernytsky said Ukraine would resume high exports late this year after local farmers cut prices due to bumper supply.

"We will resume exports after our farmers understand that we have too much grain on the market. It could be in October or even later. The second half of this season could be the period of high Ukrainian shipments," he said.

Source: Reuters  |  #grain   |  Comments: 0   Views: 93

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