Friday, October 8, 2010

Ukraine Introduces Grain Export Quota

While new grain export quality control procedures, which in effect suspended wheat exports from Ukraine, have been lifted (see 8/27/2010 post), the Ukrainian Cabinet of Ministers established a limit of approximately 4 mln. tonnes of grain exports until at least the end of this year. Although a mechanism for dividing this quota between exporters has not yet been established, the government is considering the possibility of an auction. The government promised to lift the quota after grain is purchased for reserve purposes. (Interestingly, it has been suggested that the export quality control procedures were introduced after the price of grain increased in July at the request of Ukrainian grain traders to permit them to avoid their contractual obligations at the old prices).

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