Ukraine's grain traders are ready to halt milling wheat exports on an informal basis, as they approach a critical limit, in order to protect the domestic market after a poor harvest, the agriculture ministry said on Friday. Exports of milling wheat have reached 5.2 million tonnes so far this season, said the ministry, which had previously agreed to allow traders to ship abroad no more than 5.5 million tonnes.
Agriculture minister Mykola Prysyazhnyuk held a meeting with traders on Friday at which they expressed their readiness to curtail milling wheat exports, he ministry said in a statement. "We are ready to stop (milling wheat exports)," the ministry cited Volodymyr Klymenko, head of the Ukrainian Grain Association UZA, as saying.
At the same time, a ministry spokeswoman said, "no concrete decisions have been taken" on banning exports. Ukraine's position on an outright embargo has been the subject of intense speculation since Prysyazhnyuk said last month the government would ban wheat exports from November 15. His statement drew criticism from the European Union and Ukraine's main trade partners, prompting the ministry to soften talk of an outright ban. It said instead it would apply "necessary measures" to limit sales if a critical shortage of food grain appeared.
Ukraine's position on a formal or informal ban is key to keeping its strategic export business intact. Egypt, the world's biggest importer of wheat, earlier this month threatened to remove Ukraine from its list of suppliers in 2013 after Kiev said it would halt exports. Egypt's General Authority for Supply Commodities (GASC) said however on Tuesday that the former Socviet republic had formally requested it to stay on a list of suppliers.
Ukraine, a major grain exporter along with its Black Sea neighbours Russia and Kazakhstan, was hit hard by drought which cut its 2012 wheat harvest by a third to 15 million tonnes. The government is expected to hold a meeting on exports next week. Traders prefer a clear-cut ban, because unofficial barriers, which involve increased red tape, tend to favour some privileged companies, which could hurt Ukraine's image as a world trader.