Bumper Ukraine grain exports back on the agenda

Ukraine’s cancellation of grain export duties has put buoyant shipments back on the agenda – provided President Viktor Yanukovych does not delay in signing off the plans.

The country has enough time left in 2011-12 to rebuild its pace of exports sufficient to reach 9m tonnes of wheat and 12.5m tonnes of corn over the full year, Pierre Begoc, executive director at Agritel’s Kiev office, said.

"That’s optimistic, the upper side of the range, but it is possible," Mr Begoc told Agrimoney.com.

At these estimates, Ukraine’s wheat shipments would meet the US Department of Agriculture’s forecast and, for corn, exceed an estimate of 10m tonnes.

Ukraine’s parliament, as it on Friday voted to scrap export levies on grains except barley, pegged wheat and corn shipments combined at 20.2m tonnes in the 2011-12 season, which began at the start of July.

Total grain exports were pegged at 23.4m tonnes.

Crucial signature

However, for shipments to fulfil their potential requires Mr Yanukovych signing off soon on parliament’s decree to ditch the duties.

The legislation proposes the scrapping of the tariffs at the time of presidential approval, while some speculation in Ukraine that the levies’ removal will not be enacted until July next year.

"Usually president’s approval only takes a couple of weeks," Mr Begoc said.

A significant delay is seen unlikely given that supporters of the president were among politicians who backed Friday’s vote.

Winter coming…

Further delays risk reducing Ukraine’s ability to play catch-up on grain exports in part because of limits to port capacity, which can handle at most 2.5m-2.7m tonnes a month.

However, Mr Begoc also highlighted the threat posed by the onset of winter to the country’s logistics, with Kiev expected this weekend to see its first frosts of the season.

"If there is snow coming, you will not be able to drive trucks around the country so freely.

"Winter is not always the best time to transport grains in the former Soviet Union, in what can be very difficult conditions.

"If Ukraine wants to achieve a high level of grain exports, the president needs to sign off right away."

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