Ukraine to sell grain

Ukraine is likely to export a minimum 10 million tonnes of grain in the 2006/07 season (July-June) compared with a record 13.4 million in 2005/06, Ukraine's grain traders' union said on Monday.
"We will export 10 million tonnes of grain minimum. Market conditions are good and it looks like the few several years will be favourable," union director Volodymyr Klymenko told reporters.
Ukraine plans to harvest up to 38 million tonnes of grain in 2006, almost the same volume as harvested in 2005. The agriculture ministry has said Ukraine may export up to 13 million tonnes of grain in 2006/07. Analysts put the volume at up to 12 million.
Analysts and traders said a fall in the 2006 wheat crop could halve wheat exports this season to about 3.7 million tonnes from 6.5 million in 2005/06. But they said an increase in barley output might boost sales abroad to 5.2 million in 2006/07 from 3.9 million in 2005/06.
RESTRICTIONS Traders said an upward trend on the world's grain market would help Ukraine boost sales, but added that "erroneous" government policy might affect the trade. That was a reference to suggestions that grain export restrictions might be imposed and mooted changes in tax policy.
Regional authorities in southern Kherson region announced on Monday their intention to limit wheat exports from the area, saying the measure would help them replenish grain stocks. Klymenko said Ukraine's local and export trade could both be affected if other regions adopted similar limitations.
"It's unclear how traders will export grain from Kherson ports," he said. Kherson's Black Sea port grain loading capacity totals about 1.5 million tonnes per year.
The decision to limit grain exports from Kherson followed a recently announced idea of Ukraine's Economy Ministry to introduce licences for wheat exports by the end of 2006. Ukraine has not imposed any country-wide export restriction yet.
Klymenko also said Ukraine's wheat sales might be affected by uncertain grain quality. He said about 4 million tonnes of Ukrainian wheat were infested by wheat bugs. Originally classed as milling wheat, it must now be sold as feed wheat.
But grain standards and Ukrainian legislation bars any sale of milling wheat at the price of feed wheat. Traders said the government had to change current standards to enable affected wheat to be sold.
They said a high content of infested wheat had already caused the return of several cargoes with milling wheat, later sold as feed wheat. Traders suffered serious losses. Agriculture ministry officials have said the content of infested wheat seed in some grain parcels might reach three percent in 2006 compared with about 0.5 percent in 2005.