KIEV, Nov. 5 – Ukraine has postponed for at least two months the resumption of grain exports as the government attempts to boost domestic supply following a poor harvest, officials said Monday.
Ukraine was expected to resume the export of feed grains Nov. 1, but the government at the last minute decided to continue the ban through the end of December.
The decision is extremely controversial and will probably put further stress on commodity traders who had been preparing to resume the exports.
The government wants to use the next two months to increase purchases of grain to boost domestic stocks following a poor grain harvest earlier this year, according to a source in the government.
The government will also seek to monitor prices on world markets before actually taking a new decision on whether to allow the exports, the source said.
The developments come as the government desperately tries to slow down inflation caused by rising prices of food and energy.
President Viktor Yushchenko, concerned with growing consumer prices, on Friday urged the National Bank of Ukraine, the central and local governments and other agencies to launch a concerted campaign this month to stop the inflation pressure.
However, the government’s decision to postpone the resumption of exports pits Yushchenko, a liberal economist, against Prime Minister Viktor Yanukovych, who has been favoring administrative controls over the economy.
The grain exports are effectively banned for more than a year since Yanukovych had taken control over the government. The president recently criticized the government’s agriculture policy.
Ukraine is expected to produce 29 million metric tons of grain in 2007-2008 marketing season, down from 34.3 million tons produced the previous season.
Ukraine, once the world’s No. 6 grain exporter shipping more than 10 million metric tons of grain, was expected to resume the exports of feed grains on Nov. 1.
In September, the government decision called for exporting 1.203 million metric tons of grains between Nov. 1, 2007 and March 31, 2008, including 600,000 metric tons of corn, 400,000 metric tons of barley, 200,000 metric tons of feed wheat and 30,000 of rye.
This would be a sharp increase from a total of 12,000 metric tons of grain that has been allowed to export between July 1 and Oct. 1.(tl/ez)