June 19 2002, 11:38 Interfax-Ukraine

Government of Ukraine: No Grain Price Fluctuations This Year

Ukraine's 2002 grain crop is expected 10 to 15 percent less than last year, Ukraine's Vice-Prime-Minister Leonid Kozachenko said Tuesday at the press-conference in Crimea. Although a few regions will have gross grain crops even larger than 2001, the crops in eastern and southern regions have been seriously damaged by drought. Nonetheless, he believes this year's grain market to be even steadier.

The prices are forecast to fall 5 to 7 per cent when the harvest begins. Government of Ukraine has developed a number of measures to stabilize the grain market. One of them is a reduction of export expenses.

For the first time in 10 years Ukraine exported more than 10mn MT of grain, and in the coming season "our export will be approximately the same". This is explained by the fact that Ukraine now has nearly 6mn MT of carryovers and even if there is harvest 10 to 15 per cent less than last year's, the exports will stay the same thanks to carryovers.

"Ukraine will start to become a habitual supplier of the world grain markets and we should expect further expansion of our exports," Kozachenko says.

A lot has been done in Ukraine to provide grain evaluation according to the world standards. Starting from July 1 the grain quality evaluation system, allowing to qualify export grain according to its protein content, will be partially in place. Farms, willing to sell grain with more than 12 per cent protein at higher price, will be able to take advantage of the system.

"Thanks to these and other measures, we will not allow critical grain price fluctuations this year", says Kozachenko. "Beginning from October the prices will start rising and will be even higher than last year's".

One more good prospect for farmers is sunflower. "The world sunseed market will be quite lively and offering high prices.