Ukraine Sees Smaller Maize Exports to China

Ukrainian maize exports to China under a $1.5 billion loan-for-grains deal could be significantly below an expected 2 million tonnes this year, as Beijing appears to want less of the commodity, a senior government official said on Thursday.

According to a deal signed in 2012, Ukrainian state-run grain company GPZKU is meant to supply 5 million tonnes of grain to Chinese trading firm CCEC each year.

It supplied around 2 million tonnes of maize in 2014 and had planned to ship the same amount this year.

"We have no problem with trade with China. They are happy to work with us, but they say they will buy only around 150,000 tonnes of our grain," the source said, referring to negotiations for maize to be supplied during the rest of this year.

In August, deputy agriculture minister Yaroslav Krasnopolsky said that Ukraine, one of the top global grain exporters, had supplied about 800,000 tonnes of maize to China from January to August this year.

Some maize may also have been shipped in September and the first part of October although data is not yet available.

Beijing does not have any obligation to buy all the volume offered by Ukraine under the 15-year bilateral deal.

Ukraine, apparently fearing that China's economic problems might impact the deal, has proposed changing the conditions of the contract to give Ukrainian traders greater flexibility.

A large foreign trader said that the unclaimed volume of Ukrainian maize could be redirected to other markets most likely in North Africa and the Middle East.

Ukraine plans to harvest about 22-23 million tonnes of maize this year and plans to export 16 million tonnes of the commodity in the 2015/16 season.


(Reporting by Pavel Polityuk)