Ukraine's Economy Ministry has proposed that the government introduce milling wheat export licences in 2006 to prevent excessive sales. The ministry, in a weekend statement, said the current pace of signing milling wheat export deals had exceeded last year's level and could lead to a milling wheat shortage.
"The current situation calls for immediate intervention by the government to set up strong control on milling wheat exports," the ministry said.
The ministry said, however, that the measures would not affect exports.
Agriculture Minister Yuri Melnuk said last week his ministry saw no reason to introduce a new trade regime, adding that the government had announced similar plans late in the 2005/06 season without introducing the measures.
Another agriculture official told Reuters that the latest data made available by the agriculture ministry showed Ukraine would face no shortage of milling wheat while the economy ministry forecast a shortage of about one million tonnes.
"They based this on its own supply/demand balances, but we do not see this", the agriculture official said.
In line with latest official forecast, Ukraine is likely to harvest about 14 million tonnes of wheat in 2006 (clean weight) compared with about 18 million in 2005.
Agriculture officials said that additional "significant" volumes of wheat are in stocks ater last year's harvest and the country has enough grain to ensure people has bread in 2006/07.
Melnyk last week said the agriculture ministry planned to meet leading grain traders to clarify the situation on the local market. Analysts said any export limitation could hit local producers because of price falling and Ukraine could lose its share on the world export market.
The ministry has forecast exports of about 13 million tonnes of grain in 2006/07 season (July-June) compared with a record 13.4 million in 2005/06. But officials said a smaller wheat harvest could cause some decrease in wheat shipments, while the country might boost barley sales after a good crop in 2006.
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