Ukraine traders call for wheat exports to restart amid high stocks

5 Apr 2022 | Sharon Levrez

The Ukrainian Grain Association has appealed to the country's agriculture and economy ministries to end a license system introduced after the Russian invasion in late February that has effectively stopped wheat exports from the country, arguing that Ukraine has ample stocks of wheat to meet its needs.

In a statement Tuesday, the association said Ukraine had “surplus transitional stocks from last year's harvest and grain exports are hampered by blocking Ukrainian seaports,” UGA said. 

“Revoking the export license will simplify the mechanism of wheat exports and free up storage capacity for the new crop.”

In an official decree dated March 5, the Ukrainian government banned the export of basic products, including sunflower oil and barley, and restricted grain exports after the invasion began February 24, 2022.

The export of wheat was limited by government-issued licenses, which trade sources said were difficult to obtain and therefore made wheat exports almost impossible.

Two weeks ago, the Ukrainian government removed the ban on corn and sunflower oil exports, but left the wheat license system in place.

Traders are keen to resume exports of wheat as well, and argue there is plenty left to sell.

“Given the pandemic and the government's desire to create record transitional balances, grain growers have confirmed their readiness to export only 25.3 million tons of wheat, as enshrined in the Memorandum of Understanding between the government and relevant associations,” UGA said.

“As of March 1, only 18.2 million tons of wheat out of the planned 25.3 million tons were exported.”

Both Ukraine and Russia are major suppliers of wheat to global market, and the restriction in supplies from the region have led to concerns about food security particularly in African and Middle Eastern nations.

However, while the trade has found imaginative ways to move grains to potential export markets, there remain significant obstacles to bulk exports with all Ukrainian deep water ports effectively shut down.