Ukraine grain exports remain hamstrung by uncertainty over a quota system, while doubts have emerged over official Kazakh grain figures, as the fallout from depleted harvests continues to hang over the former Soviet Union.

More than two weeks after export quotas for grains took effect, merchants are still awaiting information on how the system will work, handicapping their ability to trade, consultancy Agritel said.

"There is about 400,000 tonnes already loaded onto vessels but not able to leave because they have not got the paperwork. And the licences are difficult to find" Pierre Begoc, Agritel's executive director told Agrimoney.com.

The comments also following a warning from leading Ukraine grain trader Nibulon that, with its silos already full, and unable to find export homes, it had suspended grain purchases.

Meanwhile, Sergey Ignatenko, the head of Ukraine's Kherson port, cautioned earlier this week that the site's grain storage facilities were full.

Rules missing

While Ukraine had initially pledged to begin work on allocating quotas on October 20, the process has progressed slowly, and become mired by a proposal to auction off licences which has been opposed by the Ukraine Grain Association, which represents both farmers and traders.

"Even players wanting to buy quota cannot, because they do not know how to go about it," Mr Begoc said.

"When you have the rules of the game, you can play," he added, citing local expectations that grain exports could eventually hit a "significant" level over 2010-11, and potentially around 15m tonnes.

Ukraine, while reporting a weaker grain harvest this year, did not suffer drought to the same level as its Black Sea neighbours, with wheat productions falling by some 19% on US Department of Agriculture estimates.

Nonetheless, the country's grain export system "will be far from perfect" for the rest of 2010, Mr Begoc added.

Kazakh concerns

The comments came as doubts emerged that the crop in Kazakhstan, which suffered more major weather setbacks, had reached even the 13.9m tonnes by bunker weight that Yevgeny Aman, deputy agriculture minister, revealed on Tuesday.

"Market players say that grain output in Kazakhstan may prove to be lower," Moscow-based analysis group SovEcon said, adding that a smaller crop may be behind a rise to a lofty $250 a tonne in the price of wheat delivered to the frontier with Russia.

Kazakhstan has forecast it will export up to 8.0m tones of grain in 2010-11, only 300,000 tonnes lower than last year, despite the production drop.

Once cleaned and dried, this year's crop is likely to come in below 13m tonnes, compared with 20.8m tonnes last year.

However, Kazakhstan has imposed limits even in transporting crops within some parts of the country, raising doubts over its export potential, Mr Begoc said.


agrimoney