Agriculture minister calls for end to grain export curbs in 2011-12

The Agriculture Ministry will urge the government to allow unlimited exports of grain in the forthcoming 2011-2012 marketing season, Minister Mykola Prysyazhnyuk told Reuters on Thursday, Feb. 3. “We will insist on there being no export restrictions next season,” he said.

Ukraine, the world’s top barley exporter and a major wheat supplier, introduced export quotas after a drought last summer to prevent a rise in domestic bread prices after neighboring Russia banned grain exports for the whole 2010/11 season.

We will insist on there being no export restrictions next season.”

- Mykola Prysyazhnyuk, agriculture minister.

In October, the government introduced a 2.7 million metric tons grain export quota while in December it extended the quotas until March 31 and increased the total volume to 4.2 million tons.

Ukraine, which consumes 26 million tons of grain per season, harvested 39.2 million in 2010 and could sell abroad at least 13 million this season, according to government estimates.

A farm ministry official told Reuters that Ukraine had exported 6.9 million tons of grain as of January 25, leaving room for exports of additional 6 million tons by the end of the season.

Prysyazhnyuk said his ministry would propose lifting export curbs for the last quarter of the current season and to boost the volume of quotas for January-March.

“We are considering lifting quotas for maize exports or about increasing them to the maximum. It means exports of additional 2.0 million tons of maize and 1.0 million of wheat,” Prysyazhnyuk said. “From April, I hope, we could get rid of quotas,” he said.

But traders said they needed proper rules on the Ukrainian grain market and guarantees for their current and future investments.

There will be no more investments in the Ukrainian agriculture sector if the 10 traders are left without quotas again.”

- Oleksiy Vadatursky, the head of Nibulon company.

Ukraine’s largest domestic grain exporter Nibulon said it had failed to win export quotas and had to suspend its investment projects.

“Our company is forced to suspend the construction of facilities, suspend the construction of our fleet,” Oleksiy Vadatursky, the head of Nibulon, told an international round table in Kyiv.

“We have started an investment project but we have no confidence that we will be able to complete it,” he said.

Ukrainian grain traders’ association UZA said that the procedure of distribution of export quotas was not fair and transparent and 10 top grain exporters had been left without quotas.

“There will be no more investments in the Ukrainian agriculture sector if these 10 traders are left without quotas again,” said UZA head Volodymyr Klymenko.