* Traders welcome official ban instead of informal barriers
* Recent deals with Egypt's GASC in doubt
* GASC warns Ukraine on international credibility
* Ukraine focuses on maize exports
(Adds EU farm chief reaction)
By Pavel Polityuk and Maha El Dahan
KIEV/ABU DHABI, Oct 24 Ukraine's agriculture
minister on Wednesday said the country would ban wheat exports
from Nov. 15 after a weather-damaged harvest, a move that
underpinned international prices.
Egypt, the leading global wheat importer, warned that
Ukraine risked damaging its credibility on international grain
markets. Ukraine later said existing contracts can be fulfilled.
"There will be a full ban from Nov. 15. There will be a
government order about this. We are not playing games here. We
do not have any other option," Farm Minister Mykola Prysyazhnyuk
told Reuters, confirming widespread speculation in markets in
The European Union's top farm official warned Ukraine to
avoid any measures that would increase global grain prices and
disturb traditional trade flows.
"I am deeply disappointed to see this announcement ," EU
A g riculture C o mmissioner Dacian Ciolos said in a statement. " I t
will add unnecessary tension to international agricultural
markets, and those that will suffer most will be the world's
Ukraine, one of the top 10 global wheat-exporting countries,
saw its harvest slashed by a third this year due to poor
weather, as the United States suffered its worst drought in more
than half a century. Global prices of wheat, corn and soybeans
raced up sharply over the summer period.
U.S. wheat rose on Wednesday after the confirmation on
expectations that there would be more U.S. export business.
Chicago December wheat rose 0.2 percent to $8.70-3/4 a bushel.
It had been down 0.2 percent just before the announcement.
Prysyazhnyuk had said that Ukraine would consider imposing
limits if the high level of exports threatened to push up the
price of bread at home.
Last week the government said the high pace of wheat exports
would exhaust stocks of Ukrainian wheat available for shipping
abroad by Nov. 15-20, and it urged traders to be cautious in
concluding new contracts.
Market players, who had feared the government would resort
to unofficial restrictions, were relieved.
"A full ban with a clear date is probably the best option
for traders," said a trader for a large foreign grain house.
"Everything is clear and we can claim force majeure."
In 2010, the government, under a threat of a possible jump
in local grain prices, raised artificial barriers for exports
and halted the shipments in the first months of the crop season.
EGYPT DEALS AT RISK
The ban could hit wheat purchases by Egypt's GASC, the
country's main state wheat buyer. The group bought 55,000 tonnes
of Ukrainian origin wheat in mid-September as part of a larger
tender purchase for shipment Nov. 21-30.
Another 55,000 tonne consignment was also purchased on Sept.
11 by GASC as part of a 235,000 tonne deal for Nov. 11-20
Nomani Nomani, vice chairman of GASC, said Ukraine should
carefully consider any wheat export ban before it is implemented
in order to maintain confidence in Ukraine as a global supplier
"I hope that Ukraine studies this decision very well before
passing it as it takes away from the credibility of the origin,"
he told Reuters.
GASC also said it was waiting for the government order to be
issued for more clarity.
"We will wait to see the order that is issued and the
details that are in it," Nomani said. "Will it, for example,
include all contracts or will the contracts that have already
been signed before the ban be honoured?"
Ukraine's Farm Ministry said in a statement on Wednesday
that it had agreed with traders to increase the allowed wheat
export volume in the 2012/13 season from the previous 4.0
"At present, 3.8 million tonnes of wheat have been exported.
Overall contracted volume is 5.4 million tonnes (of wheat), and
these contracts can be fulfilled," it said.
Nomani said last week that rumours of the ban were being
spread by traders seeking to increase prices.
Some European traders said efforts were being made to ship
the Egyptian cargo out earlier.
"There will be a rush to move everything out in the next
three weeks," one German trader said. "People had been expecting
a ban and had been cautious about heavy sales from the second
half of November."
"This will keep the markets firm in Ukraine for the next
three weeks. Force majeure will no doubt be a theme for the
shipments that cannot be covered," the trader added.
Others were slightly more sanguine.
"So far everything is calm here and there is no panic due to
the ban," a Ukraine-based trade source said. "Venus used to work
on a cost and freight basis, and I have not seen any big orders
in the market today."
According to official data, Ukraine had exported 7.1 million
tonnes of grain as of Oct.18, including 3.57 million tonnes of
wheat as traders doubled monthly wheat exports against the
Latest export figures, provided by the agriculture
consultancy UkrAgroConsult, showed that traders are accelerating
exports this month. They already sold abroad 1.06 million
tonnes of wheat on Oct. 1-21 and plan to sell an extra 646,000
tonnes in the near future.
Ukraine, which consumes 12 million tonnes of wheat,
harvested 15.5 million tonnes of the commodity in clean weight
FOCUS ON MAIZE
In the last few years, Ukraine has turned to maize planting.
It boosted maize production to 22.7 million tonnes in 2011 and
plans to harvest at least 20 million tonnes in 2012.
The ministry has said about 12 million tonnes of maize were
likely to be exported in 2012/13 season.
It said 2.2 million tonnes of maize had been exported so far
in 2012/13. The ministry said an additional 1.7 million tonnes
of maize were due to be sent abroad in the near future.
"Local wheat prices are likely to decrease slightly," said
Mykola Vernytsky from ProAgro consultancy.
"Traders will focus on maize and there is no ground to
expect that Ukraine will limit maize sales - the country does
not need such high stocks of this commodity," he said.
Ukraine exported 14.7 million tonnes of maize in 2011/12.
(Additional reporting by Michael Hogan in Hamburg, Jonathan
Saul in London, Maha El Dahan in Abu Dhabi and Charlie Dunmore
in Brussels; editing by Keiron Henderson, Veronica Brown and