Fears loom with traders that exports could be restricted again.
Ukraine is expected to reap a bumper harvest of more than 47 million metric tons this season, nearly 12 percent higher than gathered last year, according to a forecast made public this month by the United States Department of Agriculture.
According to the USDA, Ukraine – one of the world’s top 10 grain-producing nations in recent years – will likely export more than 21 million tons of grain this season, up from an earlier estimate of 17.9 million tons.
Prime Minister Mykola Azarov was more optimistic, predicting on Aug. 10 that the nation could export up to 24 million tons. The boost in grain exports is expected to have a positive impact on the nation’s trade balance.
It should bring additional hard currency into the country at a time when prices and demand for steel, Ukraine’s top export, could fall amid slowing global growth.
But concerns continue to loom with some international agribusinesses that the country’s leadership could restrict exports again to keep domestic food prices low ahead of a 2012 parliamentary election.
With export restrictions in place since last autumn, Ukraine exported a mere 12 million tons of grain from last season’s 39 million ton harvest. The restrictions drew harsh criticism from experts and business advocates.
A quota system introduced last autumn was widely criticized for being non-transparent, unjustified and favorable only to a select group of companies. The quota system was replaced this July by export duties of 9-14 percent.
