Ukraine, one of the world's top grain exporters, on Wednesday delayed a widely expected decision to introduce grain export quotas that would more than halve exports after severe weather ravaged its harvest.
The government will consider plans to limit wheat exports to 1.5 million tonnes and barley exports to 1.0 million tonnes in September-December 2010, at its next weekly meeting, expected on August 25, Deputy Agriculture Minister Serhiy Melnik said.
"(The quotas issue) has been delayed until the next meeting)," Melnik told reporters after a weekly government meeting, adding the government needed more data on grain volumes in ports and en route to export terminals.
Ukraine's grain harvests have been hit by severe frosts in the winter and a scorching summer. Neighbouring Russia has banned grain exports after a drought which sent global wheat prices to two year highs earlier in August and triggered inflation concerns in both nations.
Russian weather forecasters on Wednesday said mass planting of winter wheat for harvesting next year was unlikely to start before Sept.10 because of its drought, which could hamper efforts to compensate for grain lost in this year's harvest.
Earlier on Wednesday Ukraine's Economy Ministry said grain export quotas were intended to ensure the nation of 46 million people had enough bread after its damaged harvest.
"The destruction of significant areas under winter grains in winter 2009/10, unfavourable weather during grain growth and harvesting, insignificant grain stocks have affected Ukraine's local grain market," the ministry said.
"The main task of the resolution is to ensure food safety by imposing licences and export quotas for some agriculture commodities for the period until December 31", it said.
Ukraine needs to keep inflation under control under a deal with the International Monetary Fund which last month agreed to lend the cash-strapped country $15 billion within the next 30 months.
Under the same deal, it has raised gas prices for households by 50 percent this month to reduce budget deficit, making potential wheat and bread price hikes a very sensitive issue.
Ukraine's central bank said on Wednesday it expected consumer prices to rise by up to one percent month-on-month in August after four months of deflation, due to the gas price hikes.
The new quotas are likely to more than halve combined wheat and barley exports from the former Soviet republic compared with the 15.4 million tonnes sold in the previous marketing season which ran from July 2009 to June 2010.
That volume includes 9.2 million tonnes of wheat and 6.2 million of barley. In the 2008/09 season Ukraine exported a record 12.6 million tonnes of wheat and 6.3 million of barley.
Ukraine plans to harvest about 17 million tonnes of wheat clean weight in 2010 down on 2009's 20.9 million tonnes because of the adverse weather conditions.
Ukrainian traders, however, said the proposed volume of export quotas was too low because the country, which consumes about 12 million tonnes of wheat per season, could export 6.0 million tonnes of wheat and 4.0 million of barley this season. UZA said it had asked the government to avoid any grain export limits until September 15 and to lift current informal limits and barriers which make exports nearly impossible.
Traders said export limits could cause a fall in local grain prices and cut profits of Ukrainian grain producers.
The union said Ukraine had exported 1.2 million tonnes of grain so far this season, including about 700,000 tonnes in July, while the former Soviet republic sold abroad a total of 4.0 million tonnes in July-August 2009.
ReutersLast Mod: 18 Ağustos 2010, 17:52