Ukraine may decide to restrict wheat exports next month after demand accelerated faster than available supplies, said Volodymyr Klymenko, head of the country’s Grain Association.
Wheat shipments this season may reach 5.3 million metric tons by Nov. 15-20, a point that threatens to exhaust the country’s exportable surplus, First Deputy Agriculture Minister Ivan Bisyuk said today. Shipments have already reached 3.6 million tons since the marketing year began July 1, he said. The U.S. Department of Agriculture has estimated that Ukraine’s total exports in the 2012-13 season would only reach 4 million tons after drought curbed production.
Agriculture Ministry and industry representatives met today in Kiev, the capital, to discuss supplies, and the group may hold a follow-up meeting Nov. 15, Klymenko said today in a phone interview.
“Should the pace of wheat exports be the same as we have now, the government may make the decision to limit them,” Klymenko said.
Drought may cut combined wheat production in Ukraine, Russia and Kazakhstan by 37 percent this year to 64 million tons, the lowest in nine years, the USDA estimates. In 2010, Ukraine set quotas on grain exports and Russia banned shipments after drought slashed yields, helping send milling-wheat prices on NYSE Liffe in Paris up 92 percent.
Wheat prices on the Chicago Board of Trade, the global benchmark, have jumped 34 percent this year, the best performance among 24 commodities on the Standard & Poor’s GSCI Index. The December contract gained 1.2 percent to $8.7875 a bushel at 9:24 a.m. local time. In Paris, milling wheat for January delivery rose 1.2 percent to 261.50 euros ($340.71) a ton, after earlier touching 262.25 euros, the highest in a week.
Traders should be “cautious” when signing wheat export contracts, Bisyuk said in an e-mailed statement after today’s meeting, stopping short of saying the government plans to implement official restrictions. Ukraine had exported 7.1 million tons of grain this season, as of Oct. 16, he said.
“Ukraine just doesn’t have enough grain to continue the pace for the rest of the season,” Matt Ammermann, a risk management consultant with INTL FCStone Inc. in London, said by phone today. “It seems like the market has been talking about this for a while. The government has been addressing the situation over the past few months, so I don’t think it catches the market too much by surprise.”
Global inventories of wheat, soybeans and corn may drop to 347.8 million tons by the end of the 2012-13 season, according to the USDA, a five-year low, as dry weather cut crop yields from the U.S. to Europe to Australia.
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