Kiev Tells Grain Farms To Wait for High Price

KIEV -- Ukraine must do everything possible to avoid massive exports of cheap grain from this year's crop and ask farms to abstain from sales until September, Agriculture Minister Ivan Kyrylenko said on Thursday.

Kyrylenko said in a telephone interview that if farms started large-scale grain exports now, the former Soviet republic might face a shortage of bread-making grain later this year, as it did in 1999.

"I implore our farmers f don't sell your grain now, keep it in stocks, wait for autumn, wait for a good price," Kyrylenko said. "Otherwise we will see a shortage of grain again as we did this year."

"Last July, farms sold hundreds of thousands of tons of grain to traders directly from fields at 240 hryvnas ($44.13) per metric ton, but in January we were forced to import grain at over $150 per ton," Kyrylenko said.

Grain prices in Ukraine fall each year when the new harvest comes in, making exports far more attractive to cash-strapped farmers than selling onto the weakening local market.

But this leads to shortages and higher prices later in the year.

Ukraine harvested a meager 24.4 million tons of grain in the 1999-2000 season, the lowest since World War II, but it still exported about 3 million tons.

That compared with exports of around 6 million tons in 1998-99.

Kyrylenko said large-scale exports in the coming weeks would cause "huge losses" for farms and might ruin government efforts to overcome the crisis in Ukraine's agricultural sector.

Official data show that despite their grain exports in 1999, more than 85 percent of Ukrainian farms ended the year with losses worth millions of hryvnas.

Kyrylenko said Ukraine would never ban grain exports, but the ministry wanted to defend hard-up local grain producers by helping them to earn as much as possible.

"We are a country that is building a market economy, and any talk about a ban on exports is out of the question here," he said. "But we want to help our farmers, asking them to be careful and to wait for good prices."

The minister forecast a fall in domestic grain prices in the coming weeks.

Ukraine has said it plans to harvest 24.5 million tons of grain this season. That would include 12 million tons of wheat, down from 13.5 million in 1999. Farms harvested 26.5 million tons of grain, including 14.9 million tons of wheat in 1998.

The government press service said on Thursday farms had threshed a total of 1.703 million tons of grain in bunker weight by July 11, down from 4.875 million by the same date last year.