Ukraine talked down official forecasts for its grains crop just as leading private analysts added 1m tonnes to their estimate for the harvest, prompting questions over the accuracy of data.

Ivan Demchak, Ukraine's deputy farm minister, said that a previous forecast of 46m-48m tonnes was possible "if weather conditions are favourable".

"But, taking into account poor weather, the forecast could be reduced to 44m tonnes," he added, stating that 900,000 hectares of winter crops were in poor shape.

The comments follow a warning two weeks ago by Viktor Slauta, Ukraine's deputy prime minister with responsibility for agriculture, that the wheat crop would fall by nearly 3m tonnes to 18m tonnes thanks largely to winterkill.

'Trade scepticism'

However, Monday's revision came as analysts at UkrAgroConsult lifted their forecast for Ukraine's grains crops to 45.3m tonnes.

The revision by the Kiev-based consultancy reflected largely better prospects for wheat production which, following rains last month and decreased winterkill fears, looked on track to hit 19.1m tonnes, 265,000 tonnes more than it had previously expected.

"Based on adjusted data on winter crop losses, we raised our estimate for the winter wheat harvesting area," UkrAgroConsult said.

The divergence between official and private forecasts, raised eyebrows among some investors, following concerns over recent downward revision to official grain forecasts in Black Sea states.

Rabobank last week reported that, in Black Sea states, "while government figures are pointing to lower production, there is scepticism within the trade that winterkill figures and production declines are being inflated in order to support domestic prices and increase grower returns".

A trader told Agrimoney.com on Monday: "If Ukraine's harvest turns out to be a bit bigger than the government is forecasting, its farmers may not complain."

Bonds-for-VAT 

UkrAgroConsult also raised its forecast for the country's corn, of which Ukraine has become the northern hemisphere's second largest exporter after the US, saying the harvest would come in at 12.35m tonnes.

The improvement of 650,000 tonnes reflected in part the early moisture for the spring-sown crop, but also its relatively low expense in Ukraine, where tight public finances have delayed repayment of some $1bn in VAT rebates to exporters, exacerbating in turn a cash squeeze on growers.

Maize will cost about 518 hryvnia ($65) per tonne to grow, compared with 746 hryvnia ($94) per tonne for wheat, according to the Ukraine Grain Association UZA.

Ukraine last week published a decree confirm it will repay the VAT through an issue of bonds, carrying a 5.5% coupon.

"Though the rate of interest offered by the state is below market, the bond issue will provide much needed liquidity to exporters in general," Andrey Verevskyy, the chairman of sunflowers-to-silos group Kernel said.

"As to the grain export business , this initiative comes in time to provide financing to operators for the next grain harvest and will therefore positively impact the farming sector as a whole."