Year in review: Grain market – all’s well

2012 has been the year when the state for the first time in the history of Ukraine’s grain market has managed not only to reach agreement with grain traders on the conditions of their work, but also to abide by its commitments. As a result, the first half of the marketing year was one of the most successful for Ukraine in terms of grain exports – the country has shipped a record high of 14 million tonnes of grain onto foreign markets.


According to preliminary results, Ukraine in 2012 threshed the third largest yield of grain – about 46.2 million tonnes. Yet, the issue how to manage the gathered harvest was addressed by the state at the beginning of the season with the engagement of market operators. On July 31, 2012, the Agrarian Policy and Food Ministry signed a memorandum with representatives of public organizations that represented interests of grain traders to determine the rules of the game for the entire marketing year (July 2012 through June 2013). Thus, the state pledged in written form that grain exports from Ukraine might be limited only when they reach 80% of the set limit fixed for each grain crop. As for the limits, they were the following: 4 million tonnes of wheat, 3 million tonnes of barley, and 12.4 million tonnes of corn.

Later on, the wheat export limit was raised to 5.5 million tonnes. Even after that level was reached early in December 2012, the government did not close the border for wheat exports, noting that traders stopped shipments abroad voluntarily. Market operators claim that there were no active supplies of wheat in December 2012 and they were halted at a level of 5.7 million tonnes.

At the same time, the ministry admits that wheat exports by the end of the season may top 6 million tonnes. Moreover, the ministry suggested that traders buy 300,000 tonnes of wheat for export from the Agrarian Fund, as the Fund needs money to handle payments with farmers under forward grain contracts.

For reference: the yield of wheat in 2012 was 15.7 million tonnes, according to rough estimates. With wheat ending stocks of the 2011 harvest being 5.3 million tonnes and domestic consumption being 12 million tonnes, the export potential of this crop is estimated at 9 million tonnes. However, experts note that wheat stocks should be about 3 million tonnes by the end of the marketing year to ensure the country’s food security.

It should be noted that exporters more than happy with the rules of the games set for the current marketing year. The policy of the state on the grain market is absolutely transparent and clear, says Volodymyr Klymenko, the President of the Ukrainian Grain Association, which unites grain traders in Ukraine.

“The main thing is that none of the companies was in the red. All work normally, everything is clear to everybody,” he said.


Wheat was the major crop in grain exports in Ukraine in the first half of 2012. In the second half of the marketing year it may yield to corn, having exhausted its possibilities. The Agrarian Policy and Food Ministry estimates corn exports in the 2012/2013 marketing year at 14 million tonnes. Of which, over 5.7 million tonnes have already been exported. The ministry reported that Ukraine by December 17, 2012 had threshed about 20.3 million tonnes of corn for seeds from 4.3 million hectares (99% of the target).

To promote corn export, the ministry started to look for new foreign markets. It succeeded in November 2012 – Ukraine agreed biosecurity requirements for corn with the Chinese side, which clears the way for corn exports to China. According to Agrarian Policy and Food Minister Mykola Prysiazhniuk, the ministry agreed with grain traders that they would decide on their own who and what amounts of corn will export onto the Chinese market.

Late in December 2012, the State Service of Plant Quarantine of Ukraine reported that public joint-stock company Rise Company and private joint-stock company Rise-Maksimko, part of Ukrlandfarming agro-holding, and public joint-stock company State Food-Grain Corporation had announced plans to export corn to China.

As for one more export grain crop – barley, its prospects for this year are not as bright as those of corn and wheat. The gross yield of barley in the current year was 7.2 million tonnes, according to rough estimates (it was 9.1 million in 2011). Its exports by the end of the season are expected not to top 3 million tonnes.




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