Ukraine delays decision on wheat export cap

Wheat prices resumed their rally on Wednesday (Aug 18) as the prospect of another country limiting exports fed into supply concerns.

The Ukrainian Government announced that it is to delay its decision on whether to limit wheat exports for the rest of the year because of dry weather hurting the harvest.

Wheat prices hit a two-year high earlier this month because a severe drought in Russia destroyed about one-fifth of the grain exporter’s harvest.

Russia has suspended exports for the rest of the year because of damage from the weather.

Dryness in Ukraine and heavy rains in Canada has also hurt crops.

Cabinet ministers have offered to allow the export of 1.5 million tonnes of wheat and 1 million tonnes of barley until the end of 2010, with the quota proposed to start from 1 September, according to the website agrimarket.info.

The proposed quotas would more than halve exports in the current season, according to The Financial Times.

Traders have said that the country could export up to six million tonnes of wheat in the 2010/11 season if no quotas were applied, reported the news service.

Earlier this week, the minister for agrarian policy Nikolay Prysiaghniuk said a limitation had been discussed in order to satisfy the food safety of the country.