Ukraine's grain exports are in a dilemma
According to the latest harvest estimates, Ukraine is looking forward to a record harvest of an estimated 60 million tons. The previous peak harvest was 55 million tons.
The wheat harvest performed well on average. The decisive contribution will come from maize with an estimated volume of 28 million tons (+25% above average), which is expected to deliver far above-average yields this year under favourable climatic conditions.
Export volumes are provisionally estimated at around 29 million tons (25% above average), including 8.5 million tons of wheat and 18 million tons of maize.
However, the prospects of a record export volume are considerably diminished by the significantly reduced sowing of winter cereals as a result of the persistent rainfall. According to the Ukrainian Agrarian Confederation (UAC), around 3 million hectares have currently been sown. The plan was for 8 to 8.5 million hectares.
The weather and soil conditions for the coming weeks are not very promising. The sowing window in Ukraine will soon be coming to an end, as the seeds should be sufficiently developed if they are to survive the severe winter frosts.
Sowing spring cereals is possible in principle, but only with the prospect of significantly reduced yields.
In view of the expected reduction in the 2014 harvest, there are considerations to limit export activities in order to secure self-sufficiency. Ukraine has already gained experience with the instrument of export quotas in previous years. Whether and to what extent it will be used has not yet been decided. In any case, it would be a good idea to lower Ukraine's fundamentally high export potential somewhat in relation to actual export volumes.
