AGGRESSIVE exports from former Soviet Union countries pose a threat to Australia's traditional grain markets.
Russia and Ukraine have begun pushing grain into Asia and the Middle East after a lay-off of about six months when drought threatening their own domestic supplies prompted a ban on exports.
But with production back to normal, Australia can expect greater competition from the Black Sea region in the future.
Viterra's managing director for the European, Middle East and African region, Christian Joerg, said Russia and Ukraine had become significant producers of grain in recent years, largely as a result of acquiring better seed and adoption of western technology.
Mr Joerg said another former Soviet state, Kazakhstan, was also likely to become a major grain exporter as its productivity increased as well.
In 2008-09 and 2009-10, the combined wheat exports of Russia and Ukraine exceeded shipments by the US.
Ukraine was also a major exporter of barley in both of those seasons.
Mr Joerg said Ukrainian farmers were relatively cash-poor, but found barley an easy crop to grow and not requiring much inputs to get good production.
"That's why they have been increasing barley exports out of Ukraine," he told this year's Australian Grain Industry Conference in Melbourne.
He said that as farmers became more sophisticated, they were looking to higher-value crops, such as corn.
"Be assured, the corn share of Ukrainian grain will increase in years to come."
Mr Joerg said Ukraine had a third of the most fertile land in the world.
"There is huge potential there," he said.
"It has high water retention capacity and the climate is generally very supportive for crop growth.
"It uses one fifth the fertiliser application of the European Union." Competing against wheat exported out of Black Sea ports was not easy.
