Agrarian analysts upgrade forecasts for 2008 grain harvest

According to Interfax, two leading Ukrainian agrarian analytical agencies upgraded their forecasts for the 2008 grain harvest, based on the first results of crop gathering (1 mln mt, as of June 30). UkrAgroConsult raised its general projection for the harvest from 41.0 mln mt to 43.0 mln mt, due to higher forecasts for wheat crops (21.8 mln mt vs. the previous 20.0 mln mt) and barley (10.3 mln mt vs. 9.9 mln mt). The Analytical Agency Agriculture increased its forecast from 39.2 mln mt to 41.1 mln mt. Meanwhile, last month the United States Department of Agriculture also increased its forecast for the Ukrainian grain harvest this year by 3.5 mln mt to 43.2 mln mt. The Ukrainian Agrarian Ministry predicts a harvest of 40.0 mln mt (+36.5% yoy). Andrii Parkhomenko: Theupgraded forecasts reaffirm our belief that Ukraine has a strong export potential for grains in 2008 and that this sector will play a major role in the overall growth in exports out of Ukraine. With the abolishment of export quotas upon accession to the WTO, we believe that Ukraine will be able to export about 16.0-18.0 mln mt of grain in 2008, implying domestic demand of 25.0-27.0 mln mt and a harvest of 43.0 mln mt. This implies exports of USD 3.5-4.0 bln in 2008, up from USD 0.8 bln in 2007. We forecast the external trade deficit to shrink to 5.5% of GDP (USD 10.7 bln) in 2008 vs. 5.6% in 2007.