Ukraine eyes higher Middle East grain exports

KIEV: Ukraine, riding high on expectations of a good harvest, hopes to boost its grain exports in the coming season and re-establish trading routes to Middle East clients which have been disrupted by political unrest, its agriculture minister said yesterday.
A major producer of wheat, maize and barley, the former Soviet republic is looking at a 17 percent rise in grain output this year which could allow for exports up to 27 million tons in the coming season, Mykola Prysyazhnyuk told Reuters.
That compares with a total of around 23 million tons of exports in the season now ending.
This year's grain harvest could be up to 54 million tons - only two million tons short of a record set in 2011, he said.
This could include 20 million tons of wheat and up to 28 million tons of maize which would be a record for that crop in Ukraine.
Ukraine is a net-exporter of wheat but it has in the past made itself unpopular on international markets by imposing limits on exports, arguing that it had to guarantee basic bread levels for the home population.
But there should be no limits in the new 2013/14 season, at least to start with, Prysyazhnyuk said in an interview yesterday. "There ought not to be any limits until at least Jan. 1 (2014)," he said.
Exports of wheat could reach 9 million tons in 2013/14 and the ministry would persuade traders to export "as much maize as possible", he said.
Political conflict in the Middle East where Ukraine has major grain clients has hurt Ukrainian grain exports there, reducing them by 30-40 percent from previous levels.
But traditional markets in this region and North Africa remain top destinations for exports, the minister said.
Kiev wanted to export at least 2.0 million tons of grain to Iran and up to 1.5 million tons to Syria every year.
"It will be good if we can supply 2.0 million tons of grain to Iran. As for Syria, (the exports of) 1.0 to 1.5 million tons would be very good. We want to increase our presence in this market," Prysyazhnyuk said.
"We understand that the Syrian problem will not go on for ever," he said. "The situation is now improving. We hope that if there is no more social unrest, we will restore the volumes of exports," Prysyazhnyuk said.
Ukraine exported about 156,000 tons of wheat and 253,000 tons of maize to Iran in the first 10 months of this season, data provided by the UkrAgroConsult consultancy showed.
Ukrainian exports to Syria included 407,000 tons of maize and 320,000 tons of wheat.
Last September, the ministry and traders' unions agreed to cap 2012/13 export volumes after a drought and a spike in foreign demand threatened to leave Ukraine without enough grain for domestic consumption.
The pact came as major importers moved swiftly to secure grain supplies from the Black Sea region, driven by fears that drought-stricken neighbor Russia may eventually be forced to impose export controls.
Worried about a potential deficit, the government forced traders to limit wheat exports to 5.5 million tons in the 2012/13 season, although it later raised the cap to 6.3 million tons.