Ukraine suspended loading of grain for export at its ports late on Thursday after the customs service stopped approving export contracts under quotas introduced by the government, a trader said on Friday.
Exports will be held up for at least several days due to a legal hitch that is stopping traders from shipping grains either freely or as part of the quota system introduced in mid-October, traders and analysts said. "Grain loading in ports was suspended from Thursday night, but we hope the situation will become more clear later today," the first trader said.
The government, estimating a smaller-than-expected grain crop, introduced export quotas in October to restrict grain exports to 1.6 million tonnes to the end of the year and keep domestic prices stable. Traders say the quotas are illegal, a view supported by a Kiev court that this week ordered a temporary halt to the system pending further investigation.
As a result, Ukraine's customs service said on Thursday it had ordered its offices to suspend the approval of export contracts under the quotas in order to comply with the ruling. "The situation is completely unclear. Traders cannot export under quotas, but they also have no right to free exports for the moment," another trader said.
Mycelia Vernytsky of ProAgro agriculture consultancy said: "In line with our legislation, customs must allow free exports, but there is a chance that exports will be completely blocked."
Customs officials were unavailable for comment. In line with the government resolution, traders are allowed to export 600,000 tonnes each of maize and barley to the end of the year, plus 400,000 tonnes of wheat and 3,000 tonnes of rye. Ukraine's Economy Ministry said on Thursday exporters had taken up all the wheat and barley export quotas.
Ukraine, which estimates a harvest of about 35.1 million tonnes of grain in 2006, exported a total of 495,750 tonnes of grain in October through its seaports, compared with 1.674 million tonnes in September. Traders and analysts said current export restrictions were the reason for the decline.
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