Ukraine plans no restrictions on soaring grain exports

Citing its own sources, Reuters reported that Ukraine would consider limiting milling wheat exports in the first half of 2022, with officials expected to decide on the issue in mid-January.

Reuters added that Ukraine government officials were concerned strong exports would increase domestic prices for high-quality bread-making wheat, making the staple more expensive at a time when Ukraine’s inflation is close to record highs.

27% hike in wheat exports sparked concerned

The concerns sparked as Ukraine exported 15.6 million tonnes of wheat as of late December in the 2021/22 season, up 27% compared to the same period of the previous year. It was estimated that the country was only able to deliver around 10 million tonnes more, including 6 million tonnes of feed wheat – without damaging its own consumption needs.

Together with the Agricultural Ministry, the Ukrainian Grain Association is closely following grain exports dynamics, the organisation said in a statement, adding that there were no reasons to introduce any restrictions. In 2021, Ukraine collected a good wheat harvest of 32.7 million tonnes, while the domestic consumption is limited to 6 or 7 million tonnes.

No grounds for wheat export restrictions

“There are no grounds for a possible restriction of wheat exports, and such messages [about possible restrictions], in our opinion, is another round of information war against Ukraine,” the Ukraine Grain Association said in a statement.

“Any export restrictions would make it difficult for farmers to sell their crops. They would not receive income and reduce the planting area under these crops. As a result, Ukraine would see its yields falling. It will also drag down the investment in the grain industry, ” the organisation added.

Infrastructure challenges

On the other hand, the Ukraine Grain Association raised concerns over the physical constraints of the existing logistics infrastructure in Ukraine, which makes it “extremely difficult for agricultural producers” to export the projected 25.3 million tonnes of wheat, given that the country also collected 40 million tonnes of corn, most of which is also destined for export.

Russia’s grain & wheat quotas

On the contrary, the Russian Agricultural Ministry has recently confirmed it would set grain and wheat export quotas for February 15 to June 30 at 11 million tonnes in an attempt to secure domestic supplies.

So far, Russian wheat exports have been down 37.5% since the start of the marketing year on July 1. This is due to a smaller crop and the export tax of $91 a tonne of wheat. The export tax was raised further to $94 from December 22.