Ukraine drought may affect global grain price
2012-08-10 16:42:36
As the world's two leading grain exporters-- the United States and Russia-- both faced droughts which already drove wheat and corn prices to a record high since 2008, rising grain costs have become an escalating global concern.
In Ukraine, a key grain exporter in the Black Sea region, a heatwave has forced experts to slash this year's grain harvest estimates, which, in turn, may affect global grain price.
CLIMATE CHANGE BLAMED
A severe drought with temperatures reaching 40 degrees Celsius has hit grain-growing areas in Ukraine, in particular in its southeastern and eastern regions, and the Ukrainian government is expected to slash the target of the country's crop turnout for this year.
Ukraine's weather forecasters said that the drought and the heatwave spreading across the country are very likely the consequences of global warming.
"Certainly, global warming has left a significant impact on the drought in Ukraine. The hot air that came from the South East, the South West and the Mediterranean was heated in the territory of Ukraine, because there were no clouds," said Natalia Golenya, deputy chief of the Ukrainian state weather forecasting center's meteorological department.
The persistence of warm anticyclones was one more reason for Ukraine's 2012 summer drought, Golenya said in an interview with Xinhua.
"We have registered high pressure in the atmosphere this summer. Thus, air masses were being lifted up instead of falling to the ground, resulting in dry weather," Golenya said.
NO CRITICAL PROBLEMS
The severe drought has revived memories about Ukraine's grain crisis in 2010, when the country lifted restrictions on wheat and barley exports. However, the local agricultural experts stressed that the scale of these two events can not be compared, saying that this year's drought will not greatly affect the total yield in Ukraine.
"We will have a quite normal harvest this year. The drought has affected harvest in southeastern and eastern regions, while both the western and northern regions will have a very good yield, because there was enough moisture," said Tetyana Adamenko, head of the state weather forecasting center's agricultural department.
Adamenko did not specify the total damage to crops, but told Xinhua that nearly a half of Ukraine's sown areas have suffered from an abnormally hot weather.
Adamenko said that the drought will have a negative effect on the yield of potatoes and sugar beets, as well as maize, adding that the heat wave has a very little impact on cereal crops that have already ripened.
High temperatures may even positively affect the grain yield, the expert said.
"The quality of grain this year will be very good due to high temperature and moisture conditions. The grain will have a lot of protein because of dry weather during the ripening. A high-protein grain has a very high quality. Ukraine will have very little feed grain this year," Adamenko said.
She said that Ukraine's state weather forecasting center expected the country's overall harvest at around 43 million tons compared with the government's estimate of 45.3 million tons.
MARKET EXPECTATIONS
Ukraine's domestic prices of grains have spiked significantly over the last week in Ukraine, local experts said.
Despite the government's optimism about good harvest, markets now expect that prices for Ukrainian wheat, barley and especially corn will remain strong through the current marketing year, which will end on June 30, 2013.
"Droughts in Russia and the United States are pushing global grain prices up, and the price of grain in Ukraine is directly linked to the world market. Given the drought in the East European country, it is safe to say that prices will raise further, stirring up the global market," chief of the Kiev-based research firm "ProAgro" Mykola Vernitsky told Xinhua.
Experts have not yet predicted the margin of grain price hike due to the unknown total harvest, but they said that two main factors will certainly keep prices high.
Analysts noted that Ukraine saw a good harvest and a decline in prices last year. Now the prices are expected to level off due to the low yield. In addition, the higher quality of Ukraine's grain this year will boost the price.
Most local experts agreed that the price of Ukrainian corn will rise by at least 20-25 percent due to the low yield. This will have a huge impact on the world market, as Ukraine is the third largest global corn exporter.