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Analysts see bumper Ukraine grain crop, exports

Kiev, May 26, 2011

Favourable weather is likely to boost Ukraine's grain harvest to 43-47 million tonnes in 2011 and the ex-Soviet state could export 21-22 million tonnes taking advantage of smaller crops in western Europe, analysts said.

A severe drought cut Ukraine's grain harvest to 39.2 million tonnes in 2010 from 46 million in 2009.

'Prospects of this year's harvest are good and this means that Ukraine could harvest 43 or even 45 million tonnes of grain,' Mykola Vernytsky, director for ProAgro agriculture consultancy, told Reuters in an interview.

Vernytsky said Ukraine's wheat harvest could rise to 21.5 million tonnes in 2011 from 16.8 million tonnes in 2010, while the barley harvest could increase to 9.8 million tonnes from 8.5 million tonnes.

'The total volume of the harvest would depend on maize. Officials say the maize sowing area is increased by 15 per cent this year, but I'm not sure that the additional sowing area in northern Ukraine could add significant volume', he said.

Ukraine harvested 11.9 million tonnes of maize in 2010 and analysts forecast the crop could jump to between 12.7 million tonnes and 13.2 million this year.

Last week analyst UkrAgroConsult said it might boost Ukraine's 2011 maize harvest forecast to 13.2 million tonnes due to an increase in the sowing area.

'We are raising our harvest forecast because of a jump in maize sowing area. We forecast the 2011 grain crop at 45-47 million,' UkrAgroConsult director Serhiy Feofilov told Reuters.

Ukraine's exports in the drought-hit 2010/11 season, which is currently drawing to a close, are likely to fall to around 11-12 from 21.5 million in 2009/10, due to its smaller crop and trade restrictions, including export quotas. But analysts say the country has a chance to return to its usual export levels taking advantage of the potentially good harvest in 2011 and a possible gap left by poor crops abroad.

Feofilov said Ukraine's exports could be supported by drought in western Europe and a possible decrease in harvests in North America after drought and excessive rains.

'Problems in Europe will help Ukraine. We will not enter new markets, but a decrease in European harvest makes the competition on traditional markets softer,' Vernytsky said.

'Our advantage is low prices and being close to the consumers' markets. If the prices are low, North Africa and Middle East will import our grain.'

Vernytsky said Ukraine could export 8 million tonnes of wheat, 5 million tonnes of barley and 6 million tonnes of maize in 2011/12.

'Ukraine will have enough grain to cover all shortages on the grain market caused by a fall in harvest across the world,' said Feofilov.

Ukraine, which consumes only about 26 million tonnes of grain per season, in October imposed grain export quotas in a bid to prevent a rise in domestic bread prices after a fall in harvest and high global grain prices.

The Ukrainian government on Wednesday cancelled grain export quotas which were due to remain in place until June 30, Interfax Ukraine news agency quoted Farm Minister Mykola Prysyazhnyuk as saying.

Ukraine's parliament last week imposed export duties on wheat, barley and maize and analysts say the ex-Soviet republic does not need additional export curbs.

'When the harvest is good there is no other reason to restrict exports,' said Feofilov.

'The main goal of these duties is to bring money into the budget and the state is unlikely to impose more curbs'.

Vernytsky, however, was less optimistic and said the government could return to export quotas if the restrictions help it to fight inflation.

'The rise in domestic prices could force the government to consider quotas next season,' Vernytsky said.-Reuters




Tags: agriculture | commerce | Trade | farming | Ukraine | harvest | food grains |

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