Ukraine Asks Traders to Limit Wheat Exports Due to Weather

Ukraine asked grain traders to limit wheat exports after drought and frosts damaged the winter crop, Volodymyr Klymenko, head of the country’s Grain Association said.

“The ministry asked us not to sign too many contracts for wheat,” Klymenko said in an interview from Kiev today.

The former Soviet state will have to replant almost half of its winter grains with spring crops, Prime Minister Mykola Azarov said today, according to a statement on the government’s website. “We had severe frosts in January and we will have to re-sow 3.5 million hectares (8.6 million acres) with spring grains,” he said.

Ukraine’s Agriculture Ministry estimated about 8.4 million hectares of winter grains, most of which was wheat, was planted for the 2012 harvest. About 1.84 million hectares, of 7.2 million hectares which sprouted, were in good condition, the ministry said yesterday.

Ukraine’s wheat harvest is seen declining to 13.7 million metric tons in 2012, Liza Malyshko, a UkrAgroConsult analyst, said Feb. 7. That compares with last year’s 22.3 million tons, when the country reaped a record 56.7 million ton grain harvest, according to the state statistics office data.

This year, the worst drought in at least 50 years weakened winter grains, most of which is wheat, from September through November. Low temperatures at the end of January and this month caused further damage to plants raising government concerns about meeting domestic demand.

Export Estimate

Ukraine reduced its grain exports estimate to as low as 23 million tons for the marketing year started July 1 after drought damaged winter grains for the 2012 harvest, Serhiy Kvasha, head of the agriculture markets department at the Agriculture Ministry, said on Dec. 5. He was unavailable to comment when Bloomberg news phoned his office today.

Grain exports in the country have been restriction free for a little more than a month. Ukraine taxed barley exports from the summer through Dec. 31 and corn and wheat from the summer through October, when the duty was scrapped due to last year’s record crop. Before the summer, the country’s grain exports were limited by quotas for seven months following the summer drought in 2010.

The winter grain damage may be the worst since at least 2003, UkrAgroConsult’s Malyshko said. Ukraine reaped 20.2 million tons that year, the smallest since 1991, when the country got its independence, according to the state statistics data.

To contact the reporters on this story: Kateryna Choursina in Kiev at kchoursina@bloomberg.net

To contact the editors responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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