KIEV (Reuters) — Heavy rains across Ukraine look set to shrink winter grain areas and slow exports but will not prevent the first shipments of corn to China under a landmark $1.5 billion deal signed last year, agriculture minister Mykola Prysyazhnyuk said on Tuesday.
Prysyazhnyuk said in an interview winter grain area sown for 2014 harvest could shrink by about 20 percent, a much less drastic decline than forecast by Ukraine’s grain lobby which last week said up to 60 percent could be lost.
“I think we could lose 1.5 million hectares (3.7 million acres of winter grains),” Prysyazhnyuk said, adding winter barley could fall to 1.2 million acres, a decline of around 60 percent.
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He said winter wheat area could fall to 15 million acres against an initially anticipated 17 million.
Ukraine has sown about 5.4 million acres of winter wheat as of Sept. 30 or 32 percent of the forecast. Farms sowed 11 million acres of winter wheat at the same date in 2012, according to the ministry’s data.
The former Soviet republic has lost its mantle as the world’s top barley exporter in the last few years while emerging as one of the leading exporters of corn.
Prysyazhnyuk said that rainy weather had also slowed the pace of the corn harvest and the ministry was forced to revise its export forecast for October.
“We had expected the exports of 2.8 million tonnes of grain in October but we were forced to revise the figure to 2.2 to 2.3 million tonnes because of a lack of maize,” Prysyazhnyuk said.
Ukraine had harvested 3.5 million tonnes of maize from 14 percent of the sown area as of Sept.30.
Prysyazhnyuk said the slow pace of corn harvesting would not affect Ukraine’s plan to export its first corn to China, under a $1.5 billion deal signed last year.
“In line with the contract, the first cargo must leave Ukraine by Oct.30, the second – by Nov. 30. If the buyer is satisfied with the quality, we will export an additional 120,000 tonnes by the year-end,” Prysyazhnyuk said.
He said an additional 1.0 million tonnes of corn could be exported to China in the second half of this season.
The shipments would be covered by Ukrainian state-run grain firm GPZKU.
Under a deal agreed last year with China, GPZKU obtained a $1.5 billion loan to finance improvements to the former Soviet republic’s agriculture.
GPZKU is exporting its grain via Chinese operator China National Machinery Complete Industry Engineering Corporation.
Prysyazhnyuk said earlier this year that Ukraine would also receive permission to export Ukrainian wheat to domestic Chinese market, but on Tuesday he said such shipments could take place only next season.
“We will not supply wheat to China by the end of this season,” he said, adding that Chinese authorities will examine Ukrainian wheat next year.
Prysyazhnyuk said that Ukraine, which harvested about 22 million tonnes of wheat in clean weight this year, plans to export about nine million tonnes of the commodity in the 2013-14 season versus seven million tonnes in 2012-13.
He said Ukraine’s exportable surplus was even higher, but the ministry was considering increasing the country’s wheat ending stocks to about 3.5 million tonnes from about 2.0 million tonnes at the beginning of this season in a bid to cushion a potential decrease in the 2014 harvest.
Prysyazhnyuk said that some Ukrainian wheat would move to Syria and Iran under government-to-government deals.
He said GPZKU had exported 94,000 tonnes of wheat to Syria in July-September and planned to ship another 20,000 tonnes of wheat flour to the country in the near future.
Iran received 235,000 tonnes of Ukrainian grain, including 180,000 tonnes of corn. Kiev also exported 30,000 tonnes of soybean to Iran so far this season.
