UPDATE 2-Ukraine customs delays 24 grain ships

Published 09/07/2010, 08:12 AM

* Ships carrying 379,647 T of grain, mostly wheat for export

* Traders say total blocked volume is much higher

* Russia says has enough grain to cover needs

(Adds traders comments, background)

By Pavel Polityuk

KIEV, Sept 7 (Reuters) - Major grain exporter Ukraine is holding ships carrying a month's worth of exports in its ports, traders said on Tuesday, while Russia said it had enough grain to feed itself in a fresh contradiction to previous statements.

Ukraine's Customs Service, reacting to lower harvests after severe weather, has blocked in ports 24 vessels bound for export carrying 379,647 tonnes of grain, mostly wheat, traders' union UZA said in a statement on Tuesday. "According to the latest data, about 20 ships are staying in ports without official explanations. Some of the ships have been in port for more than one and half months," UZA said.

UZA said 17 ships were held in the Black Sea ports of Mykolayiv, Kherson, Odessa, Sevastopol, Ochakov and Yuzhny. Another seven are in Azov sea ports Brdyansk and Mariupol.

But traders said the real volume of grain held back at ports could be much higher.

"The data provided by UZA is just a tip of the iceberg and this is just 25 percent of the real volume. UZA counts ships of large exporters only, while there are also many ships of small traders in ports," a large Ukrainian trader told Reuters.

In late August traders said Ukraine's Customs Service had almost completely stopped grain exports from the former Soviet republic and strengthened its recently imposed additional grain quality checks.

The Ukrainian government last month proposed limiting exports of the two key commodities wheat and barley to 2.5 million tonnes between September and December but has put off the final decision until October.

RUSSIAN UNCERTAINTY

Uncertainty over neighbouring Russia's grain stocks, harvest and intentions for its export ban after a devastating drought took another twist on Tuesday when its Agriculture Minister Yelena Skrynnik said Russia had enough grain to feed itself.

She said the country's grain stocks estimates had been revised up to 26 million tonnes from 21.7 million, appearing to contradict President Dimitry Medvedev's comments on Monday that government grain stocks were insufficient to cover all the country's needs.

The Kremlin and top economic officials have been at pains to reassure the public, already feeling the inflationary effects of the drought and worried about shortages despite a ban on grain exports that will last at least until the end of the year.

"There will be enough grain for food and for the feeding of animals," Interfax news agency quoted Skrynnik as saying on Tuesday.

UNCLEAR FUTURE

One of the world's top wheat exporters, Ukraine exported 653,191 tonnes of wheat in the first two months of the new 2010/11 season compared to 1.79 million tonnes in the same period in 2009/10 because of customs action.

The wheat harvest could fall to about 17 million tonnes in 2010 from 20.9 million in 2009 after severe frosts in winter and a prolonged heatwave in July and August.

Ukraine consumes about 12 million tonnes of wheat per season and analysts say it is able to export about 6 million of tonnes of wheat in 2010/11.

Traders said they needed a clear statement from the government about the future rules on the grain market. They said the barriers on the border forced companies to suspend grain purchases from farmers and to reduce prices.

"Just tell us what the rule is. Is it ban? Is it quotas? Or we are working in the regime of free trade? Today we do not understand the rules," a trader said.

RUSSIAN TURMOIL

Ukrainian agriculture officials have said that turmoil on the local grain market is a result of Russia's decision to ban exports after its record drought slashed grain crops.

They said foreign traders could accelerate grain exports from Ukraine in a bid to cover an absence of Russian wheat on the world's market and this could leave Ukraine without enough grain to cover local needs.

But Russia, which plans to harvest 60-65 million tonnes of grain in 2010 compared to 97 million in 2009, has not clarified when it would end its export ban.

Russian President Dmitry Medvedev's said on Monday that the Russian ban on grain exports might be lifted earlier than the end of this year, which contradicted Prime Minister Vladimir Putin, who has said it may be extended to late 2011.. (Editing by Keiron Henderson)

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