Ukraine grain exports continuing through crisis

By Daniel Enoch

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, March 5, 2014 - Despite all the talk of Crisis in the Crimea, the political upheaval in Ukraine should have little effect on the country's grain shipments, according to Dan Basse, the president of AgResource, the Chicago-based agricultural research and advisory firm.

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“We don't see much effect at all on grain markets,” Basse said Tuesday in a phone interview. “Exports appear to be running normally… Ukraine is still offering grain, sun oil through July.”

Grain markets have rallied in recent days as Russian President Vladimir Putin moved troops into Ukraine, ostensibly to protect his military installations in the Crimean Peninsula, where Russia's Black Sea Fleet is based, but Basse sees that as a “one- or two-day wonder.” Any strength in futures markets today he attributed not to developments in Ukraine, but to investors seeking less risky places for their money than equities and moving into commodities.

The USDA projects Ukraine as the world's third-biggest exporter of corn this year, after the U.S. and Brazil, and the fifth-biggest shipper of wheat, most of which is sent overseas through the country's ports on the Black Sea.

The bulk of Ukraine's shipments from Crimea leave through Sevastopol, but they are a small part of the country's overall grain exports. If Russia were to cut those shipments, the grain would be moved through other ports, Basse said.

“Unless Mr. Putin decides to march his troops all the way across Ukraine,” and cut off all exports, “We do not see much effect at all,” he said.

Basse said there are already signs that the situation may be “defusing, without escalating into a full-blown war or conflict.”

“This is quickly going from a front-page story to something in the middle of the paper,” he predicted.

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