Ukraine’s corn exports could fall well below market expectations, to the lowest in five years, US officials in Kiev believe, sapped by the dent to production from a dry summer.
The US Department of Agriculture, in its benchmark Wasde crop report on Friday, lowered its estimate for Ukraine’s corn exports in 2015-16 by 1.0m tonnes to 17.0m tonnes, a decline of some 14% year on year.
The USDA cited weaker prospects for the harvest, which was downgraded by 2.0m tonnes to 25.0m tonnes, “based on harvest reports indicating lower-than-expected yield in parts of north-central and western Ukraine.
“The western half of Ukraine has been affected by persistent summer dryness and occasional episodes of high temperatures,” contrasting with bumper results seen further east, the USDA said.
More downbeat assessment
However, the USDA’s downgrades were relatively mild compared with those proposed in a report filed by its Kiev bureau last, although not made public until after the Wasde’s release.
The bureau said it had cut its own forecast for the Ukraine corn crop to a three-year low of 21.1m tonnes – representing a decline of more than 7m tonnes year on year – to “reflect reduced production area and unfavourable weather conditions impacting plant growth conditions and productivity.
“August featured high temperatures and low rates of precipitation” especially for western regions.
Some southern areas, meanwhile, “have seen torrential rains”.
‘Reduced exportable supplies’
The lower production will feed through into a drop in exports of more than 7m tonnes too, on USDA data, to the lowest since 2010-11.
“Reduced exportable supplies are expected to cause 2015-16 corn exports to decrease to 12.5m tonnes,” the bureau said.
While talk of weak volumes being shipped to China has raised some concern over Ukraine corn exports, this downturn in shipments is seen as being provoked by a wish by China to focus on running down its domestic supplies rather than a question mark over Ukraine’s exportable supplies.
Ukraine has reportedly agreed with traders to allow corn exports of 16m tonnes in 2015-16, out of a harvest officially pegged at 22m-23m tonnes.
(Source – http://www.agrimoney.com/news/us-bureau-raise-spectre-of-sharp-ukraine-corn-export-drop–8881.html)