Ukraine grain exports to drop, amid corn doubts

Ukraine's grain exports could fall by up to 22% in the newly started season, undermined by the threat of "cold conditions" to corn, besides the fallout from the country's political crisis.

The Ukrainian Agribusiness Club estimated at 26m-27m tonnes Ukraine's grain exports in the 2014-15 season, which started on Tuesday, representing a fall of 6.3m-7.3m tonnes year on year.

The fall in exports is line with a drop of 6.5m-7.5m tonnes the industry association forecast for the country's grains harvest this year, to 55m-56m tonnes, proving particularly downbeat over prospects for corn output.

Ukraine's corn harvest will fall to 24.5m-25.5m tonnes this year, from levels in 2014 which hit a record 30.9m tonnes, according to the International Grains Council and the US Department of Agriculture.

'Crucial issue'

The club said its forecast reflected in part "cold weather conditions in most Ukrainian regions", which would depress the corn yield to levels "worse than expected".

Ukraine corn harvest forecasts

Lanworth: 28.1m tonnes

USDA: 27.0m tonns

IGC: 26.5m tonnes

Ucab: 24.5m-25.5m tonnes

However, the forecast also reflected the weakness of the hryvnia, down 30% this year thanks to the country's political turmoil, which has forced growers to reassess use of imported crop inputs, "which in turn could lead to a decrease in primary crop yield", said Igor Ostapchuk, Ucab agriculture markets spokesman.

The club also highlighted the "crucial issue" of how unrest in the eastern regions, Donetsk and Lughansk, has affected sowings.

Ukrainian forces this week launched fresh military operations against pro-Russia separatists in the east, after a 10-day ceasefire ended on Monday evening.

The annexation of Crimea itself has had a relatively small effect on Ukraine's grains output, with the region responsible for "minimal" production of corn, according to the USDA.

Wheat, of which the Crimea produces some 800,000 tonnes a year, is the region's main grain, the USDA says.

Barley and wheat

Ukraine's corn output - which has soared from levels which averaged 7.0m tonnes in the first decade of the century - has become a factor of broad market importance, offering an alternative source of exports for a grain which has traditionally been available in quantity only from the Americas.

Ukraine wheat harvest forecasts

Lanworth: 22.0m tonnes

Ucab: 21.2m-22.2m tonnes

USDA: 20.0m tonns

IGC: 20.0m tonnes

Corn shipments of some 20m tonnes last season were quadruple those three years before.

Ucab was more in line with other forecasts from other commentators in estimates for Ukraine's barley crop, pegging it at 6.8m-7.3m tonnes.

On wheat, the club was relatively upbeat, seeing the harvest at 21.2m-22.2m tonnes, above the 20.0m tonnes forecast by both the IGC and USDA.

Ukraine's wheat production too is particularly closely watched on international markets, given the country's reputation as an exporter of competitively priced supplies.

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