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Tuesday, August 24, 2010

Ukraine Agriculture Brief

Ukraine’s harvest: What to expect in 2010
Harsh weather conditions have put the prospects for Ukraine’s harvest under pressure. The forecast for grain harvest has been downgraded to 40-42 MT compared to 46 MT in 2009. As a result, Ukraine’s government may consider imposing a quota on grain export. Under this policy, world prices for wheat would be pushed upwards from the current price of $5.9 per bushel. Ukraine’s domestic prices for grain, in this case, would be contained below UAH 1000 ($126.6) per tonne, which is well above the 2009 level of UAH 800 ($102.7) per tonne. Large Ukrainian agriculture companies are not expected to experience a significant negative impact from the imposition of export quotas. Domestic prices, nevertheless, are forecasted to be higher compared to 2009. Moreover, the expected 10.9% drop in grain harvest will mainly affect small land farmers concentrated on grain production.