By Pavel Polityuk
KIEV, Sept 6 (Reuters) – Ukraine may limit wheat exports in early 2013 in a bid to prevent a jump in domestic grain prices after the wheat harvest declined this year, traders and analysts said on Thursday.
Ukraine's Agriculture ministry and grain traders' unions earlier this week agreed on 2012/13 maximum export volumes at 19.4 million tonnes of grain, including 4.0 million of wheat.
Traders said the export figures would be reviewed every month.
They said the former Soviet republic had already exported 1.3 million tonnes of wheat and that the rest of the agreed volume might be sold abroad in the next two or three months, which could become a formal reason to impose export curbs.
“In the near future we can expect an announcement on forthcoming restrictions for wheat exports,” a foreign trader said.
European traders have said wheat exports from the Black Sea region could run dry by October-November, whether or not restrictions are imposed.
A Ukrainian trader said Kiev might export about 1.6 million tonnes of wheat in September-October, exhausting the agreed volume for the whole 2012/13 season.
“The limits might come into force in January 2013,” he said.
The wheat harvest in Ukraine, which faced poor weather during wheat sowing and growing, fell to 16.3 million tonnes bunker weight in 2012. Bunker weight usually exceeds clean weight by 5 to 7 percent.
Analysts and traders forecast the 2012 wheat crop at about 14 million tonnes in clean weight, down from 22.3 million tonnes clean weight in 2011.
With domestic consumption of about 12 million tonnes and several million tonnes of wheat in stocks, Ukraine has an exportable surplus of about 5 million to 6 million tonnes, traders said.
DOMESTIC PRICES
“We see a rise in domestic prices, which are following the global market. We think that the proposed 4 million tonnes of wheat for exports is an attempt to cool the local market,” said a trader from a large foreign grain house.
Analysts said the government has no other options but to limit exports if it wants to keep domestic prices at a stable and low level.
“In October, global wheat prices could traditionally rise, and Ukraine should take measures to prevent a similar rise inside the country,” said Mykola Vernytsky, an analyst with the ProAgro consultancy.
“In any case, Ukraine must limit exports because it has no other options to keep prices stable.”
Ukrainian domestic soft milling wheat prices rose to an average of $242 per tonne ex-farm as of Sept. 3 from $226 in mid-July and $206 in mid-June.
Traders said that export duties could be the best option.
Ukraine imposed export duties in the first four months of the 2011/12 season, and the move kept at least 3 million tonnes of grain inside the country.
Source: Reuters
Posted by Haylie Shipp
