UPDATE 1-Ukraine traders agree to limit wheat exports-report

Fri Feb 17, 2012 6:26am EST

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KIEV Feb 17 (Reuters) - Ukrainian grain traders have agreed to limit wheat exports to 1.7 million tonnes in February-July following a request from the government which is concerned about supply to the domestic market, Ekonomicheskie Izvestia newspaper reported on Friday.

It quoted traders as saying that only 800,000 tonnes of wheat would be exported by March and the agreed cap will limit total wheat exports in the 2011/2012 season to 4.8 million tonnes, or a half of what traders had planned to ship abroad.

Ukraine's Farm Ministry was not immediately contactable for comment.

Ukraine expects to lose a large share of its winter grains this year due to bad weather.

The ministry said this week that poor weather during sowing and wintering had damaged up to 3 million hectares of winter crops, which could be reseeded this spring. Earlier this year it said estimated the damaged area at 2.5 million hectares.

The ministry has said farms had sown 8.5 million hectares to winter crops and that a severe drought in July-November had prevented seeds in an area of 1.5 million hectares from sprouting.

According to the data provided by analysts, about 33 percent of sprouted crops, mostly winter wheat, are in a poor state.

Ukrainian traders said last week the government, worried about a possible fall in the 2012 wheat harvest, could limit exports of wheat in a bid to build up high grain stocks.

Ukraine had 8.9 million tonnes of wheat in stocks as of February 1.

The country, which consumes 12 million tonnes of wheat per season, harvested 22.3 million tonnes of wheat in 2011 and has exported no more than 3 million tonnes of wheat so far this season.

Ukraine limited exports in 2010/11 using export quotas and imposed grain export duties in the first few months of the current season after the 2010 harvest was hit by drought.

(Reporting by Olzhas Auyezov; editing by Keiron Henderson)