15:04 UK, 7th September 2010, by Agrimoney.com
UN slams grain export curbs, as Ukraine ships wait

The United Nations condemned grain export bans, even as Ukraine was said to be holding up vessels carrying a months' worth of shipments, while Russia, which has imposed curbs, said it had enough grain to feed itself.

Hafez Ghanem, an assistant director-general at the UN's Food and Agriculture Organisation, declined to criticise Russia directly for the export curbs imposed in August, following a drought in what was the world's third-ranked wheat shipper in 2009-10.

However, he condemned bans for stoking "market instability" and raising food prices for importing countries, many of which are poorer nations, "while also hurting producers in the country imposing the ban", which were left unable to exploit higher international prices.

 "We need to find ways of assuring a fluid and international trade in food products," he said.

Stocks question 

Russia's farm minister, Yelena Skrynnik, raised questions over the necessity of strict curbs, saying that the country had enough grain "for food and for the feeding of animals".

Her assessment appeared to contradict those of President Dmitry Medvedev, who said on Monday that state stocks were insufficient to meet domestic needs.

Ms Skrynnik pegged Russia's grain inventories at 26m tonnes, in line with an estimate lifted to 25.8m tonnes last month from a previous official figure of 21.7m tonnes through inclusion of all on-farm stocks.

Analysts at SovEcon, the Moscow-based analysis group, have pegged inventories at 20.2m tonnes.

Ukraine delays

Meanwhile, Ukraine's traders' union, the UZA, warned that customs officials had blocked the departure of 24 vessels carrying nearly 380,000 tonnes of grain "without official explanations".

"Some of the ships have been in port for more than one-and-a-half months," the union said

Ukraine has delayed an official decision on its exports strategy following weather damage too its grain crop, with its scope for action limited by World Trade Organisation membership in its scope for unilateral trade measures.

However, some observers have accused officials of imposing a de facto ban by, for instance, imposing unexplained crop checks.

Analysis group UkrAgroConsult on Tuesday cut by 3.1m tonnes to 16.7m tonnes its estimate for Ukraine's grain exports in 2010-11, including a 1.1m-tonne reduction, to just under 6m tonnes, in the forecast for wheat shipments.

UkrAgroConsult also said it was cutting again, by some 700,000 tonnes, its estimate for Ukraine's grain harvest, which is now on track to slide by 12.6% year on year to 39.7m tonnes.

Bigger volatility ahead

Mr Ghanem's comments came in an internal UN interview in which he urged a tightening of regulation on futures markets to "limit any adverse impacts" from speculation.

Speculators could magnify the impact of food shocks, although they were unable create them, placing them as one of three factors - with climate change and the growing reliance for food on the drought-prone former Soviet Union – likely to see markets become more volatile.

"In the years ahead, we'll probably be seeing more of the turbulence we're in now," he said.

EXTRA OPTIONS
PRINTABLE VERSION
EMAIL TO A FRIEND
RSS FEEDS
RELATED ARTICLES
Australia gets double boost from world wheat woes
Evening markets: crops prove a match for EU bank fears
Russia may lift export ban in July, says SovEcon
UN extends round of cuts to world wheat forecasts
Wheat sets fresh highs, as UN warns over 'turmoil'
EXTERNAL LINKS
Agricultural Commodities
Agricultural Markets
Agricultural Companies
Agricultural Events