Ukraine plans to more than halve its barley and wheat exports in the current season compared with last year, an industry source said on Tuesday, after severe winter frosts and a scorching summer ruined tracts of its crops. Ukraine, the world's largest exporter of barley and sixth-largest of wheat, is due to make a final decision on quotas on Wednesday.
Following a move by neighbouring Russia which has banned all grain exports due to a severe drought that is afflicting key grain producers in the Black Sea region. Worries about the wheat crop in the Black Sea region pushed global prices to a near two-year high recently, as the region contains three of the world's top ten wheat exporters.
The industry source told Reuters Ukraine will limit wheat and barley exports to 2.5 million tonnes this year and another 2.5 million tonnes in the rest of the marketing season from January to June next year. "This volume (of quotas) will be considered by the government (at the August 18 meeting)," said the source at a Western grain trading company who asked not to be named.
The Agriculture Ministry declined to comment. Traders have said the quota is likely to apply to wheat and barley but not maize which also accounts for a significant share of Ukraine's exports. In the 2009/2010 marketing season which runs from July to June, Ukraine exported 9.3 million tonnes of wheat and 6.2 million tonnes of barley. It exported 224,630 tonnes of wheat and 414,372 tonnes of barley in July. This means the quota, likely to take effect next month, will limit Ukraine's combined wheat and barley sales in the current season to less than half of the previous season's volume. The worst drought in more than a century may cut Russia's grain output by 40 percent this year.
Leading Russian agricultural analyst SovEcon said on Monday it cut its 2010 grain crop forecast to 59.5-63.5 million tonnes from a previous forecast of 70-75 million tonnes, a day after Russia's first grain export ban for 11 years kicked in. Coming after Russia's bumper 97 million tonne crop last year, the drought has destroyed crops over large areas, sparking wildfires which have shrouded Moscow in smog for days, and forcing up world grain prices.