Ukraine's 2019-20 wheat exports may not breach 20.2 million mt level: analysts

New Delhi — Ukraine's Ministry of Economy, Trade and Agriculture on Monday proposed to limit the country's 2019-20 (July-June) wheat exports to 20.2 million mt, but analysts believe the country's exports are not expected to breach the level.

Markets do not seem to be excited by the news, as Ukraine mostly likely will not reach the indicated volume of 20.2 million mt by the end of June, Barva Invest Ukraine told S&P Global Platts.

The news is not a big deal as the actual exports are likely to be lower amid a lack of exportable wheat availability, analysts said.

So far, Ukraine has exported around 18 million mt of wheat, while another 570,000 mt of wheat is lined up for sailing in the first half of April, according to Barva Invest. For the remaining three months, we see limited demand from the main trading partner countries in the MENA region, it added.

The world's fifth-largest wheat exporter, Ukraine is expected to ship 19.5 million-20.2 million mt of the grain in the current marketing season ending June 30, Barva Invest estimated.

Ukraine is expected to export 20.5 million mt of wheat in 2019-2020, 28% higher than the previous year, according to the US Department of Agriculture.

Ukraine primarily exports 11.5% milling-grade wheat, in addition to feed-grade wheat.

As of March 30, Ukraine's total grain and flour exports stood at 45.77 million mt in the marketing year that started July 1, 2019, according to the Ukraine's Ministry of Agrarian Policy and Food data released on Monday.

SUPPLY CHAIN CONCERNS

Amid the growing coronavirus pandemic, several countries have been going into lockdown to limit the outbreak, leading to food supply chain disruptions across the world.

There are no major supply shortages due to the coronavirus so far, but logistics issues have been growing as lockdowns pressure supply chains, the UN Food and Agriculture Organization recently said.

Ukraine on Friday said it was directing 160,000 mt of food wheat to domestic processing in an aim to stabilize flour prices in the country. The Ministry of Economy, Trade and Agriculture said at the time that it continues to stay in touch with domestic millers and monitors daily export volumes, and will take necessary measures if required.

Any ban on Ukraine's grain and oilseeds exports may lead to irreparable catastrophic consequences for the country's economy and budget, according to Ukrainian Grain Association.

Another major Black Sea player, Russia, recently proposed a quota of 7 million mt for export of grains, including wheat and corn, for April to-June in order to stabilize the domestic market.