*Drought cut Ukraine harvest to 38 million tonnes
*Export quotas could reduce domestic prices
*Ukraine to consider whether to impose quotas for 2011
(Adds analysts comments, export data)
By Pavel Polityuk
KIEV, Oct 19 (Reuters) - Ukrainian grain export quotas took effect on Tuesday at a total of 2.7 million tonnes as the government aimed to prevent a sharp jump in domestic prices after a severe drought reduced the 2010 harvest.
Official newspaper Uryadovy Kurier published a government resolution detailing the quotas, which covered 2 million tonnes of maize, 500,000 tonnes of wheat and 200,000 tonnes of barley and would run until Dec. 31, 2010.
Two leading grain exporters in the Black Sea region, Ukraine and Russia, have been hit by the drought, which destroyed large grain areas and forced Russia to ban grain exports this season.
Agriculture officials have estimated the 2010/2011 harvest at about 38 million tonnes, down from 46 million the previous year. Ukraine consumes about 26 million tonnes of grain per season.
UkrAgroConsult agriculture consultancy said the quotas could help the government reduce local grain prices in the near future but that significant stocks would prompt the cabinet to avoid export curbs in the second half of the season.
"We forecast that domestic prices could slightly decrease," UkrAgroConsult director Serhiy Feofilov told Reuters.
According to UkrAgroConsult data, domestic soft milling wheat prices rose to an average of $195 per tonne ex-farm as of Oct. 18 from about $184 per tonne in late September.
Ukrainian milling wheat cost about $152 per tonnes ex-farm in early July, 2010.
FREE EXPORTS IN 2011?
Feofilov said Ukraine had enough grain in stocks to ensure free exports in the second half of this season and that the government was likely to cancel the limits in January.
"The government is unlikely to impose new quotas in early 2011 because grain stocks are high," Feofilov said.
Farm ministry's officials have said that this year's harvest allows Ukraine to export up to 13 million tonnes of grain this season, compared with 21.5 million in 2009/10.
Analysts and Ukrainian traders' union UZA predicted before the quotas that exports would be as much as 15 million tonnes and that the total grain supply could reach more than 40 million tonnes due to high stocks.
Feofilov said Ukraine could export about 7 million tonnes of grain in July-December 2010, including 2.7 million under the quotas.
UkrAgroConsult had said in a statement on Tuesday that Ukraine exported 585,300 tonnes of grain Oct.1-12 against 482,100 in the same period in September. The country exported 3.45 million tonnes of grain in July-September.
But another analyst, Mykola Vernytsky from ProAgro consultancy, said the quotas in 2011 would depend on WTO reaction on the current curbs and the level of global grain prices.
"If the reaction by the World Trade Organisation is calm, Ukraine could maintain quotas for the second half of this season. If not, we could cancel official limits and renew non-official curbs which we had before," Vernytsky said.
In late July, Ukraine's Customs Service imposed additional quality checks for exporting wheat, which delayed shipments. The customs lifted the checks in early October. (Editing by Jane Baird) (Reuters Messaging: pavel.polityuk.reuters.com@reuters.net, +380 44 244 9150))