Ukraine Wants To Up Grain Export Pace

With news emerging this week that Egypt has said it will not take Ukraine wheat for the rest of the 2008/09 season due to quality issues, the Ukrainian Grain Association (UGA) is urging the country's authorities to follow Russia's example and adopt measures to stimulate grain exports.

Ukraine has already exported about 10 million tonnes of grain in the current marketing year, but further exports might become a problem due to tougher competition on world markets, as well as the inferior nature of this years crop.

UGA president Vladimir Klimenko said, "We need to export at least another 10 million tonnes of grain. If this does not happen, then by July 1 we will have reserves of about 17 million tonnes - that would be a catastrophe."

A carryover of these proportions, coming into the 2009 crop, would cause huge logistical problems for a country estimated to have less than 30 million tonne of commercial grain storage facilities.

Ukraine's nearest rival on the world market, Russia is planning to accelerate procedures for refunds of value-added tax on grain exports, lower grain transportation tariffs and introduce export subsidies, Klimenko said.

He said Ukraine should also stimulate grain exports by accelerating VAT refunds and reducing freight rates for grain.

Ukraine produced an around 28 million tonnes more grain in 2008 than it consumes domestically, and is hoping for a similar harvest in 2009.