UKRAINE (14 November)

FAO estimates the 1997 cereal and pulse harvest at 35 million tons, substantially larger than the drought reduced 1996 output, the recovery reflecting a sharp increase in the areas sown, better weather and increased use of inputs. This forecast is about 2 million tons higher than current harvest reports indicate to allow for under-estimation of output. The area sown to cereals is estimated to have increased by almost 2 million hectares, rising to 15.3 million hectares. but crops on at least 1.5 million hectares have been lost due to winterkill and persistent rains in the summer and autumn, which led to cut crops germinating and rotting in the field, and to a loss of quality. In addition, there is uncertainty about the proportion of the maize area which will be harvested for grain rather than for silage. The 1997 output of wheat is provisionally estimated at 19 million tons, significantly more than output last year, (estimated by FAO at 15 million tons), mainly in response to markedly better yields for winter grains. That of coarse grains is forecast at 14.9 million tons, 50 percent more than FAO’s estimate for 1996, due to a 24 percent increase in the area and better yields. Output of paddy is expected to increase to 90 000 tons but dry conditions in the spring severely affected pulses and reduced the harvest to about 1 million tons.

Average yields of all grains have remained well below potential due to shortcomings in farm management and crippling shortages of cash and collateral for timely purchase of inputs. Virtually all inputs are obtained via commodity agreements (for grain) with the state or private traders. As farmers give priority to obtaining supplies of fuel and fertilizer and not to herbicides/pesticides, weed and pest infestations are an important reason for the poor yields.

With regard to other crops, excessive moisture in the summer has adversely affected potatoes and vegetables and reduced their storage life. The sugarbeet crop benefited from better precipitation, but shortages of working capital and fuel, as well as poor weather, destroyed the harvest and kept yields low. Output of sunflowers is expected to increase only marginally from last year’s drought reduced level.

The state remains heavily involved in production, trade and marketing and its dominance is bolstered by regional authorities’ freedom to ban the movement of grains until the federal and regional state orders are filled, its control of the grain silos, priority access to the inadequate railway and port facilities and an increasing amount of costly and time-consuming certificates and services which can only be provided by the state. Despite the sizable exportable surplus of grains in 1997/98, estimated at 5-6 million tons, all these constraints coupled with keen competition from the Russian Federation, could limit the country’s exports this year to about 1.6 million tons. To utilize the feed-quality grain surplus, quality standards have been lowered by the government: grade IV wheat has been declared food quality. Waste, stocks and industrial use of grains are all expected to increase. The customs data for 1996/97 indicate that cereal exports totaled 1.6 million tons including nearly 1.3 million tons of wheat. Actual exports are estimated to be somewhat higher in part as flows to Belarus and some official dealings are not included.