The Ukrainian government has extended export grain quotas until the end of April, keeping in place strict measures opposed by grain growers.
The Ukrainian government has extended export quotas for grain until the end of April, keeping in place strict measures that grain growers and traders complain hinder their business.
Ukrainian grain producers have been lobbying the Ukrainian government to loosen grain export restrictions which they said led to losses of $1.3 billion during the last eight months, according to Ukrainian Grain Association (UGA) President Volodymyr Klymenko.
The government’s export restrictions are hurting Ukraine’s grain producers, said Klymenko, adding that “the new Ukrainian government should have lifted the export ban on feed grain over a month and a half ago.”
The Cabinet of Ministers of Ukraine passed a decree on March 28 to extend export quotas for wheat, barley and rye until April 30.
The decree also annuls export quotas for corn, but keeps a feed grain export ban in place.
The current export quotas for the marketing year are 200,000 tons for wheat, 400,000 tons for barley and 3,000 tons for rye.
The UGA urged the Ukrainian government “to abolish immediately the ban on feed grain export and increase the export quota for wheat up to 1 million tons.”
Many agricultural experts said export quotas have had negative effects on the Ukrainian economy, squeezing exporters out of world markets at the most unfavorable time.
“Grain prices are at world record levels and farmers and agricultural businesses in Ukraine need to be able to take advantage of those opportunities and not be stifled by incompetent government action,” said Morgan Williams, president of the US-Ukraine Business Council.
If the government wants to keep tight control on exports, “then let’s do it in a rational way,” he added.
The government is hesitant to loosen export restrictions because of “lobbying by groups interested in cheap grain,” said Andriy Yarmak, a private agribusiness advisor.
He added that “it is very clear to everyone that such limitations cause huge losses to farmers,” which leads to great losses by Ukrainian grain growers.
In order for the government to resolve the issues of export limitations, the authorities need to cooperate with Ukrainian farmers and traders and establish how much of the harvest reserves are in the country and how much needs to be exported, said Kostyantyn Kuznetsov, chief economist at the Razumkov Center for Economic and Political Research in Kyiv.
Experts are pessimistic the government will lift the export restrictions in the near future.
“I don’t see any change in [the government’s] attitude,” Yarmak said. “They have just recently basically banned sunflower seeds and sunflower oil exports.”
Ukraine’s trade balance keeps worsening, posing a threat to the Ukrainian currency, the hryvnia, analysts also said.
“If they continue limiting exports, the situation will only worsen,” said Mykola Kompanets, honorary president of the UGA.
As of March 1, grain stocks at Ukrainian agricultural enterprises and companies handling storage and grain-processing stood at 12 million tons, which is 21 percent more than a year ago, according to the State Statistics Committee of Ukraine.
Last year, Ukraine harvested 29.3 million tons of grain, including corn. This year, Ukrainian grain producers expect harvests of more than 40 million tons.
