Ukraine Grain Exports Up 10 Pct Despite Lower Crop

Despite reduced output this season grain exports out of cash hungry Ukraine are running at record levels, 10% above last season's pace.

The Ag Ministry say that 12.2 MMT of grain has been exported so far this marketing year (Jul 1 - Dec 10), of which wheat accounts for 6.1 MMT (2008: 5.9MMT), barley 3.6 MMT (4.3 MMT) and corn 2.3 MMT (0.85 MMT).

An additional 1.43 MMT of rapeseed has also been exported, they add.

Revised figures suggest that this season's grain harvest will total 46.2 MMT in clean weight, 13.3% down on last season's record 53.3 MMT.

The official Ministry estimate for total exports this season is still 20 MMT (25.2 MMT last year). Some pundits are predicting that this figure will rise to closer to 23-24 MMT, that certainly looks possible given the current pace of exports. The question is are they robbing Peter to pay Paul?

Ukraine's own domestic grain consumption is estimated at 27 MMT, sure there will have been a carryover from last season's bumper crop, but what about the state of the crops in the ground right now for harvesting in 2010?

Air temperatures over the weekend feel as low as -16-17 °С in the north east of the country close to the Russian border, with lows elsewhere of -8-10 °С. The USDA's latest snow cover map here shows virtually no protection at all from these freezing temperatures, making winterkill a real possibility, although we are unlikely to get any official confirmation of this any time soon.

With an election looming in January, truth might be a bit thin on the ground. The existing Tymoshenko government are hardly going to say: "hey guess what, we've been exporting more grain than our stocks warrant, because we're desperate for cash. The IMF don't fancy our credit rating much, so we've been raising cash by selling the only thing we've got of value. Sorry about the lack of food. Vote for us!"