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Ukraine eyes big grain imports, better 2004 crop
KIEV ,Ukraine plans to import about two million tonnes of grain by December to meet domestic demand after a poor harvest and hopes for a better crop in 2004, the deputy prime minister for agriculture said on Tuesday.
Ivan Kyrylenko said he expected next year's grain harvest to reach 35-38 million tonnes after the government estimated one of the worst crops on record this year at 20-22 million.
"This year the agricultural sector is surviving one of the most difficult natural disasters in the last decade," Kyrylenko told parliament, presenting a government report on the sector.
Frosts in December, ice on fields in January to March and drought in May and June killed or damaged million of hectares of winter grain, causing a fall in the wheat crop to about four million tonnes in 2003 from 20.5 million in 2002.
Ukraine, the breadbasket of the former Soviet Union and an active grain exporter over the past two years, faces a shortage of milling wheat as the country of 48 million people consumes about six million tonnes of the wheat annually.
Imports were vital, he said.
"The situation on the international markets will be relatively favourable for the next two or three months. During this time, by December, we need to buy about two million tonnes (of grain)," Kyrylenko said.
Ukraine suffered severe food problems in June, when prices for bread and wheat products jumped by an average of 20 percent and many elderly people queued for hours to buy food in scenes unseen since independence from the Soviet Union in 1991.
The government then managed to stabilise the market by selling grain from the state reserve, introducing price controls and agreeing on massive grain imports from Russia, Kazakhstan and the United States.
Ukraine plans to import one million tonnes of grain from Russia this year and 1.2 million from Kazakhstan over an unknown time scale. It will also buy a total of 100,000 tonnes of wheat in the United States during the 2003/04 (July-June) season.
Analysts have said the government would require imports of about 3.5 million tonnes of grain in 2003/04.
Kyrylenko said officials would work to ensure a better harvest next year.
The government has channelled 270 million hryvnias ($50.62 million) to make commercial bank loans cheaper for farmers and 360 million hryvnias to help the winter grain sowing campaign. It also agreed with oil traders to secure smooth fuel supplies.
"After an extremely difficult 2003, we do not hope for a record crop next year but we will do everything possible to harvest 35-38 million tonnes of grain," Kyrylenko said. "Winter grain will be sown on more than eight million hectares."
Farmers started winter grain sowing last week and are expected to finish by October, he said.
Kyrylenko urged deputies to allow the government to cancel value-added tax payments for grain importers until next August and keep zero customs duties for wheat and rye imports until June 1, 2004.
MGR Archive 10.9.2003
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