Trade Ministry starts accepting applications for grain exports within quotas

The Ministry for Economic Development and Trade of Ukraine has announced the start of the acceptance of applications for grain exports within the quotas set by the government for the period of until March 31, 2011.

The announcement, which is dated December 31, 2010 (1630 Kyiv time), was actually posted later.

Under the quota distribution procedure, which was amended by a cabinet resolution and made public on December 28, 2010, the period for submitting applications was reduced from 15 days to seven days from the posting of a respective announcement on the ministry's Web site.

Along with the applications, a grain exporter should provide supporting documents from the Agrarian Policy and Foodstuffs Ministry on grain availability and the company’s capabilities for exporting it.

As was reported, Ukraine from October 19 until December 31, 2010 imposed quotas for the export of 2.7 million tonnes of grain, including 500,000 tonnes of wheat, 200,000 tonnes of barley, two million tonnes of corn, and 1,000 tonnes of each of rye and buckwheat.

Then a resolution dated December 6, 2010 and made public three weeks later prolonged the grain quotas until March 31, 2011. Moreover, the overall size of the quotas was increased by 1.5 million tonnes, to 4.2 million tonnes. In particular, the quota for corn exports was raised from two million tonnes to three million tonnes, and that for wheat export from 500,000 tonnes to one million tonnes.

Over that period, the quotas were distributed only once according to a procedure much criticized by market operators. The cabinet issued a quota distribution resolution on November 10, 2010 with the deadline for submitting applications set at November 12, 2010, and many exporters were unable to receive the required conclusions from the Agrarian Policy and Foodstuffs Ministry and submit their applications in time.

An ad hoc commission on November 12, 2010, distributed the 2.182-million-tonne quota among grain export companies. In particular, Nibulon Ltd., Kernel-Trade Ltd. and Serna company with foreign investment obtained 52.6% of the grain export quota.

Then the economy ministry announced that applications for the export of corn within the undistributed export quota set at 518,000 tonnes were to be accepted between November 16, 2010 and November 30, 2010. There is no information about the distribution of the remaining quota.

Late in December, Agrarian Policy and Foodstuffs Minister Mykola Prysiazhniuk said that Ukrainian Prime Minister Mykola Azarov had instructed the government to consider the possibility of cancelling grain export quotas early in 2011. "There are instructions from the premier to practically cancel quotas late in January or early in February," he said.

According to the agriculture ministry, Ukraine exported 5.9 million tonnes of grain from July 1, 2010 to December 22, 2010. Of the grain, exported were 2.4 million tonnes of wheat, 2.3 million tonnes of barley and 1.067 million tonnes of corn.

In 2010, Ukraine harvested 41.5 million tonnes of grain in bunker weight, according to rough estimates.