For two and a half months, Ukrainian grain traders have exported a half of the annual export volume of wheat specified in the memorandum concluded with companies. If this pace of wheat export continues, the annual volume (4 million tons) will be withdrawn before February 2013, Serhiy Kvasha, director of the economic development department at the agriculture ministry's farming sector, told a press conference in Kyiv.

"In order to slow down the pace of exports, the ministry proposes setting not only annual, but also monthly quotas for export. Exporters will have to agree on limiting the volume of wheat supplies to 50-100 thousand tons monthly. Meanwhile, they must reduce the share of wheat in export volumes, replacing it with other grains," the source said.

As reported, according to the memorandum signed between the agrarian policy ministry and market participants, the ministry shall inform of any changes in the quotas 60 days prior to their introduction.

The ministry, in turn, claims that export restrictions are necessary to maintain price stability in the domestic market. However, market participants believe that the declared amount is nearly halved. Thus, as of August 1, the domestic market had a little over 20 million tons of wheat with a demand of 11.8 million tons. The total crop forecast for the 2012-2013 marketing year is from 14 to 16 million tons. Obviously, the calculations did not take into account either the current record carryover amount - as of July 1, it was 9.8 million tons of grain (2.3 times more than as of July 1, 2011).

Ukrinform