Fitch: Wheat producers in Ukraine to suffer little impact from potential export restrictions

15.11.2012

Major wheat producers in Ukraine would suffer little impact from the potential introduction of export restrictions later this year, Fitch Ratings has said in an analytical survey.

Fitch said that the discussions held with producers indicate that most had been anticipating export restrictions because of the weaker harvest, and had therefore already sold most of their stocks, while usually they would have stored significant amounts through the winter to take advantage of the seasonality of soft commodity prices.

At the same time, the document says that the government's record of interfering in grain markets, which included export restrictions during Q3, 2011 and Q4, 2011, limits the credit ratings of farmers and traders such as Kernel and Mriya Agro to the 'B' rating category.

Fitch notes that nevertheless, the Ukrainian agriculture sector has good long-term growth prospects.

"Yields are low compared with western European producers and there is significant potential for improvement through further investment in machinery and fertilizers," reads the document.

Fitch analysts said that a structural shift towards corn production, with the area used to grow corn increasing by 10-15% annually in recent years, was a further positive development.

"Farmers have shown evidence of strong crop-yield potential for corn in Ukraine, and we also expect slightly less regulatory pressure on corn than on wheat, because of wheat's importance as a staple food," reads the survey.

Fitch

Related Articles:
Related Article
Milk production continues to increase in Ukraine. Thus, according to preliminary estimates by the end of the year it wil
Related Article
Gomselmash has plans to set up a trading house in Ukraine, reported head of the company’s marketing center Dmitry Mulyar
Related Article
The number of dairy animals in the country had ended its 21 year declining trend and will stabilize in 2012. The tren
Related Article
The Economic Development and Trade Ministry of Ukraine has said that free economic zones could be restored in Ukraine, F
Design by BS-Agro

. Thanks to Joomla 2.5 templates by FTS