Farmers likely to bow down to government 'no sales' request in hopes to avoid last year's massive grain shortage
gree to delay large-scale grain exports for several months this year after a government appeal to abstain from sales until September.
President Leonid Kuchma and Agriculture Minister Ivan Kyrylenko said last week that massive grain sales to traders in July 1999 were the main cause of grain shortages this year and led to a jump in bread prices in all Ukrainian regions.
Officials said hard-up local farms had sold about 90 percent of their wheat to traders last July at about 240 hryvnas ($44.13) per ton.
In a bid to avoid last season’s “mistakes”, the agriculture ministry has asked regional authorities and farmers to delay grain sales and keep prices as high as possible.
“As in Soviet times, some regional authorities understood this appeal as an order and issued an “unofficial ban” on any movement of grain in their region,” one analysts said.
Similar bans on grain sales have provoked traders’ ire in the past.
Analysts and traders hope this season’s restrictions will not become an “insuperable obstacle” for grain trade, but they say it may affect grain exports in the period July to September.
“We have just started to buy this season’s grain,” a representative of one big grain trading company said. “We have not faced insuperable obstacles so far, but no one can predict our regional authorities.” Official data shows Ukraine exported 670,000 tons of wheat in July-September 1999, while the country’s wheat export over the whole 1999/2000 season may total 1.905 million tons, down from 4.327 million tons in 1998/1999. “We expect that local administrations will continue to interfere heavily in the market for at least the next two months. This will delay contracts being concluded and export shipments for the next 60-90 days,” UkrAgroConsult consultancy said.
“Local interference is increasing just after harvesting for at least the third year in a row. This has now become a traditional method for market and price formation in Ukraine,” the consultancy noted.
State officials say Ukraine will be able to harvest about 24.5 million tons of grain in 1999, while independent experts say this year’s crop is unlikely to exceed last year’s record low harvest of 24.4 million tons.
Officials also say Ukraine may export about two million tons of grain from the 1999/2000 crop compared to about three million tons exported from the previous harvest.
The government press service said on Tuesday Ukrainian farms had threshed a total of 3.815 million tons of grain by bunker weight by July 17 compared to 6.662 million tons on the same date last year.
It also said the yield was down to 1.92 ton per hectare compared to 2.18 ton last season.
