The IMF

Not to be confused with the EMF. Unbelievable!

Mr. Dominique Strauss-Kahn, MD from the International Monetary Fund paid a visit last week and in his press release said that Ukraine faces many challenges to ensure sustainable growth and to improve living standards.

I really wish these guys would make the transcripts of their meetings public, surely they discuss more than just rhetoric.

You can read the press release in full here although the only interesting thing to make from it is the reference as to how the IMF support the government in implementing its economic programme and how the IMF looks forward to continuing to work closely with the government and people of Ukraine.

So it looks like the IMF are happy with the way things are for now and are unlikely to put any pressure on the government to improve its democratic processes any time soon.

Heating season in Kyiv starts Oct. 4

Deputy head of the Kyiv Administration Oleksandr Popov has announced the central heating will be turned on today.

Heating is usually turned on during the middle of October but as it is colder than usual for the time of year city authorities have graciously decided to fire up the boiler early.

My Dad would have never caved in so easy, “put another jumper on if your cold you pussy and turn the lights out while you at it.”

Schools and hospitals will be heated first. Radiators in residential buildings will start working later in the month.

Last Christmas I spent two weeks in hospital while they did their level best to bugger up an appendectomy. One appendix, three operations, seven holes and all with no central heating or hot water.

How I laugh now!

Thinking of investing in Ukraine?

The Government has just changed the constitution to give the President more power and the President commands a majority of loyal judges within the Constitutional Court.

There has been a de facto ban on wheat exports restricting access to lucrative foreign markets and depressing the local price as a result. This has been in direct violation of WTO rules who have done absolutely nothing about it.

The government is trying to “acquire” grain from farmers for food security. They are telling producers to provide the state with grain at 30% below market value.

The harsh winter and blistering summer depressed yields right across the country, it has been one of the most difficult cropping seasons I have ever experienced.

Having said all that the bullish rise in soft commodities has renewed interest from investors and the returns from farming are still there if managed correctly.

Oops I did it again!

One Friday the Government voted to overturn constitutional reforms passed in 2004 and return important powers to President Viktor Yanukovych.

Additionally the President now commands a majority of loyal judges within the Constitutional Court who will ratify anything the administration wants.

Is this all to keep hold of the power? The opposition think so and claim they are being intimidated, harassed and excluded from the airwaves.

Supporters suggest it is what is needed to push through the reforms needed to get the country pointing in the right direction.

Time will tell.

Weather & harvest update

Plenty of rain about over the weekend so time to catch up with some sleep.

Harvesting of sunflowers, landwork and drilling all stopped for the time being. Dry at the moment and forecast is for a settled period so everything should get underway pretty soon.

Government revenue dramatically increases with the introduction of new tax inspectors

What’s on Kiev!

Morten Harket and the A-Ha boys are playing a farewell gig later this year and those German masters of the power ballad; the Scorpions are dropping in on their world tour.

Press censorship, banning public assembly, beating up political activists, A-Ha, the Scorpions! Are the eighties back?

Police officers to learn English ahead of Euro 2012

About 40,000 Ukrainian police officers will learn English in preparation for Euro 2012 Football Championship, Ukrainian Deputy Interior Minister Viktor Ratushniak has said.

They will be learning useful phrases like “mind how you go sir”, “may I help you?” and “I think sir has had far too much fun for one evening and it’s probably best if he toddles off to his hotel now.”

Weather & harvest update

Raining pretty much everywhere. Harvesting, landwork and planting all stopped. Time for some servicing and repairs while we sit out two or three forecasted wet days.

Ukraine will decide on grain export restrictions next week

Despite the many regular assurances from the Prime Minister, the President, EBRD, WTO and the Customs Services that Ukraine will not impose grain export restrictions, Ukraine will decide next week whether to impose grain export restrictions.

Prime Minister Mykola Azarov said “the government is compiling estimates of stockpiles in the country, and depending on the volumes of grain, the government will decide next week whether to regulate the exports or allow them to be free."

"We will have a confident estimation of the grain by the end of the week.”

For “confident estimation” read “vague stab in the dark” which might be what I get if I don’t shut up.

Doing business in Ukraine #2

Tax inspectors paid a visit to a local business in Kherson yesterday.

The business belonged to an opposition mayoral candidate who was wounded during the er, meeting.

Last Friday tax officers visited an agricultural business. During this meeting four people were wounded.

You can see them in action here.

Dealing with the thieves

As I write this at about 1am local time the combines are working through the night bringing in sunflowers.

I have a team of security staff out in the field, on the combines, in the trucks and on the weighbridges making sure no one steals the crop.

What I failed to do was site someone in Kiev keeping an eye on the real thieves.

Doing business in Ukraine?

It’s worth bearing in mind that Ukraine comes 142 out of 183 on the ease of doing business ranking.

All that is wrong with Ukraine

The government has asked grain traders bung them 0.5MMT of grain at below market prices and all their export problems would be solved very quickly.

Surprisingly traders turned down this attractive offer and suggested that the state stick it up their hoop.

Now farmers are being asked to bung the state some buckshee grain.

Pardon me for saying this but fuck me! Not content with screwing farmers over by restricting access to lucrative foreign markets the state now wants to reduce what little margin they might have by stealing it.

I’m truly am lost for words.

An abundant harvest of competing agricultural exhibitions

My mate Richard in Lviv has just told me about FOUR agricultural shows on in Kiev this week! Apparently some are a result of arguments between the organisers.

Farmers have a choice of:

Thursday - Quality and Safety of Milk at Expo, Nivka
Thursday - Dutch Technology for Milk at Brovary Prospect 15
Thursday to Saturday - Zloty Osin (Golden Autumn) at VDNH
Friday to Sunday - Zloty Osin (Golden Autumn) at Chubinski

What's the collective noun for agricultural shows? A herd? A clutch?

Multi ploughing is not a euphemism

Not a scene you see every day, three conventional ploughs working in tandem.

I spotted these guys working away this morning, jolly happy in their work they seemed too. They even gave me a cheery wave as I pulled over and took a photo.

Who says Ukraine farming isn't high tech?
.

Sunflower cups!

I have noticed that as sunflower heads dry out they bend over and invert producing a cup like structure that is ideal for holding water. No wonder they take and age to dry our after a shower.
.

Because we have had so little rain I have yet to work out if held water evaporates or will drain through the seed head.

.

Sunflowers and wheat

Sunflower harvesting progressing with the combines working well in to the night. They normally stop around 2am as condensation lifts the moisture content.

Wheat planting going ahead with last weeks rain having done wonders to the soil moisture. The earliest sown is now up and growing well in the sunshine.

Showers forecast for today and tomorrow across most of Ukraine.

Irish farmers top EU wheat yield league

Hard work, a cool damp climate and some nifty pest control meant Irish farmers have topped the EU wheat producers league table with an impressive 8.7MT per hectare.

Well done lads.

One for the bears

An extraordinary meeting of Food and Agriculture Organization (FAO) heard that the overall harvest in 2010 could be the third highest on record.

The FAO's top grain expert, Abdolreza Abbassian, said "there is always concern about important food security crops such as wheat or rice. However, the spillover effects are nothing like we had in 2007-8, because a lot of other conditions that we had in 2007-8 which led to that sort of situation fortunately are not present".

He means the oil price is more stable.

Appeals from UN leaders that speculators should er, not speculate have unsurprisingly fallen on deaf ears.

That’s a bit like telling a dog not to lick his own gonads.

“I wish I could do that”

“Give him a biscuit and he might let you!”

Is food becoming too expensive?

The FAO is having a big knees up about this very subject in Rome and I bet the buffet will be fantastic. Here in Ukraine the government is withholding grain exports in a vain and ultimately futile attempt to keep food prices down.

Since the end of WWII successive government have pushed cheap food policies through mechanisms such as CAP or central planning depending on which side of the iron curtain you found yourself on.

Cheap food must be a good thing right? Well not exactly.

Food isn’t cheap, never has been; the real cost has just been hidden, externalised and resulted in social and environmental damage.

Social damage because we are losing touch with what food is; where it comes from, the pleasure of it, the basic social engagement involved in growing, cooking and consuming the stuff. For most people the closest they get to growing food is a weekly visit to Tesco’s, not exactly an uplifting experience.

Environmental because we as farmers have had to embrace technology to make the numbers add up. Farmers do not use pesticides because we want too, it's because we have too so we can produce food at the price society has determined it is willing to pay.

This year we produced enough wheat to make about one million loaves of bread and I will be lucky if I see much return on that investment.

Food or at least commodity prices have risen mainly because of speculation but it has generated much chatter about the price of food which must be a good thing.

Food should be expensive; it should be the most expensive thing we buy. How much of your ipod/mercedes/plasma tv can you eat when your hungry?

EBRD gives assurances that the Ukraine government has given assurances that it will not restrict grain exports, honest

The Kyiv Post is reporting that Vassili Lelakis, a board member from the European Bank for Reconstruction and Development said the Ukrainian government will not restrict grain exports and it expects the issue to be settled soon.

He also went on to say "Liverpool have a sterling chance of lifting some silverware this season". Top man!

Wheat...

...has lifted from 1,500UAH to 1,550UAH (120 to 124GBP).

Not much agreed but it is the first change we have seen in at least a month to an otherwise static market.

Is this a local blip or are we seeing a begining of an upward shift brought about by the gravitational pull from higher European prices?

I hope it's the latter but I think it's the former.

Sunflower harvest...

...is up and running after the rain at the weekend.

I didn't appreciate how much water sunflowers can absorb, I assumed the "heads down" position meant most of the rain would run off but the seeds and flower head are very porous and suck up moisture like a sponge.

The price is going north driven by demand from Russia although I had heard that sunflower crushing capacity in Ukraine significantly exceeds the domestic supply so there might be some local drivers.

Earlier this week the price was 3,400UAH (273GBP) and today we are being quoted 3,800UAH (305GBP).

All we need now is an export ban on sunflowers! Which reminds me, my contacts are telling me the export ban on wheat is less stringently applied to Russia and Russia has hoovered up (his words) all the seed wheat. Why all the demand for seed wheat when Russian plantings are forecast down? Different export restrictions apply to seed wheat. Clever eh!

News flash, almost

The Korrespondent-Ukraine quoted an unidentified government official on September 17 as saying that the de facto ban would last until October 31, the date of local elections.

The Agronomy-Ukraine blog quoted an unidentified chancer called, shall we say Mr Mike on August 17 as saying "my guess is the quota will be lifted some time after the local elections in October".

James Marson writes a succinct article on the grain export ban (here) although I don't agree with his take on the land moratorium issue for reasons I have discussed before.

Plenty of farming businesses manage without security of land tenure, it is, in my humble opinion a bit of a red herring.

Weather

The rain has stopped so we should start drilling wheat again very soon, certainly today. The sunflowers will take a little longer to dry out and we will be testing the moisture all day until it reaches less than 8%.

Plant Populations and Crop Yield

I thought it timely to discuss wheat seed rates to achieve the correct plant density (plant population) to obtain the optimum yield.

If the plants are widely spaced then not all of the land area is covered by leaves and much of the light available for photosynthesis is not intercepted.

If the plant density is increased to allow all of the sunlight to be intercepted than a positive yield increase will occur.

As the space between the individual plants decreases then neighbouring plants begin to interfere with each other (known as intraspecific competition) and yield from the individual plant will decrease, although the crop yield will increase.

This is because, despite each plant not fulfilling its full potential production, a more efficient use of the limiting factors for growth is being made by the crop. This is particularly true with respect to the efficiency of utilisation of sunlight and the ability of the crop canopy to capture more light at higher plant populations.

As the population increases yield response will start to diminish until a plateau is reached when no further yield response to plant population can be achieved.

In biological terms the optimum plant population is at the point where the plateau starts, in practice the optimum is lower than this when seed costs are taken into account.

So what is the optimum plant population? Here in Ukraine I target 400ppm until the end of the September then increase to 500ppm until mid October when I will stop planting.

Weather

Kiev - dry, sunny, blue skies, cool: Central Ukraine - raining.

Forecast is for a settled period from Wednesday which will help the sunflower harvest and wheat drilling.

A bullish day perhaps but what does it all mean for Ukraine?

Wheat up as London hits 170GBP for the first time in two years; Paris wheat rises 1.2% to 236EUR; Chicago up 1.1% to 7.47USD a bushel.

Dave Nogger writes about the why’s and wherefores of market trading in great detail, I want to concentrate on what the impact might be here in Ukraine.

As the difference between the world market and the local price has widened, the pressure on local traders must be building and at some point the pull will surely outweigh the inertia.

Will we see sudden and dramatic price realignment as a result?

The block on wheat exports has done a fair job at keeping the local price at 1,500UAH (121GBP) for the last month and as far as I know customs still hold 24 ships in port on drummed up technical charges.

But customs can’t spin out delays indefinitely with out admitting that what they have really been up to was imposing a state sanctioned grain export ban in direct contravention of WTO rules. Even the WTO might be forced in to publicly asking some questions to save face.

Customs will have to give in at some point and probably soon.

Sunflower harvest is well underway and selling at buoyant prices which will ease the need for growers to sell wheat to generate cash to pay for seed and diesel for the current plantings.

Wheat supply might not dry up exactly but may well become a little firmer.

As we move in to October I think we will see some better wheat prices as all these holds start to lose grip and to be honest 300UAH extra would make a big difference to a lot of businesses budgets right now.

It all feels a bit like the calm before the storm.

What does WTO stand for?

The WTO came back with a response to my question about what the WTO position is on current restrictions imposed on exporting grain from Ukraine?

"As an exception to general rules on trade, a member of the WTO can impose export prohibitions or restrictions on condition that they are temporarily applied to prevent or relieve critical shortages of foodstuffs or other products essential to that country."

Presumably if a member was to impose restrictions the definition of "critical shortages" would need to be determined. This is academic anyway as Ukraine is not imposing any export prohibitions or restrictions on wheat, just ask the owners of all that grain currently stuck in port.

Weather

Steadily falling rain within a weather front that is moving west to east across Ukraine.

It rains mainly on the steppe

Plenty of rain about and it looks settled in for a day or two.

Harvesting sunnies and drilling wheat has stopped as a result but will resume at the earliest opportunity.

It's funny stuff this soil; to be honest I'm still learning it's peculiar characteristics. It can get absolutely soaked but with some sun and wind can be fit to drill again in two days. I think you would call it very free draining.

Weather or not?

Grey and overcast in Kiev today, overnight rain but not much to write about. Overcast in central Ukraine but no rain yet.

Wheat drilling going flat out as is the sunflower harvest.

WTO and export restrictions

As the WTO failed to answer my question on what their position was on export restrictions I had to resort to trawling through their massive website.

This was buried in a press release on accession back in 2008:

"Export restrictions: Upon accession, export bans on nonferrous scrap metal will be eliminated and Ukraine will remove export restrictions on grains, as well as those on precious metals and stones other than gold, silver, and diamonds."

Weather

Still bone dry pretty much everywhere. Rain is forecast for this weekend but how much and where it actually falls is starting to become crucial.

We could do with some on the oilseed rape but holding off the sunflowers.

Business Ukrainian Style

The guy who was offering 3,500UAH for sunflowers yesterday had a butchers at what came off the combine last night and unsurprisingly said “it’s not clean enough” so came back with a lower price.

There is nothing wrong with the sample. This is an example of how business is conducted in Ukraine; the business ethic is essentially “feck you”.

We have another buyer on stand by and if that’s no good I’ll put the stuff in the shed and watch the price rise as the Russian export ban kicks in.

Indeed, feck you sir.

I’m just waiting for my man

Strategie Grains are suggesting that the amount of EU wheat fit for milling has fallen by 15MMT thanks to rain at harvest which presumably lowered hagbergs.

I know where you can get shed loads of quality milling grade wheat at very reasonable prices. One slight problem, it’s stuck in Ukraine. I can fill my suitcase, hand luggage and pockets and will be in Amsterdam by tea time with thirty kilos of pure grade, finest Ukrainian if anyone is interested.

Cash on deliver, no questions.

Prices

There's a big ship in port desperate to find a load of sunflowers and Crimea has yet to start combining.

Consequently we are seeing 3,500UAH (284GBP) straight off the field but word has it that once the ship is loaded we will see prices slide to sub 3,000UAH (243GBP).

Wheat prices are holding steady at 1,500UAH (121GBP) which is good but not as good as 2,300UAH milling wheat is currently trading at in Europe.

Another 200-300UAH would make a world of difference to a lot of farmers budgets.

Quote of the week

When I asked a senior Ukrainian agronomist how he calculated his seed rates he replied “instinct”.

Oh Lord help us, listen closely Cletus;

seedrate = target plant population x thousand grain weight / estimated establishment

Got that?

2010 grain harvest spin

Latest figures suggest Ukraine's grain harvest will total 38.6 MMT in 2010 and exports in the current marketing year (July 2010-June 2011) will total 12.7 MMT.

Bearing in mind that this is the third time the ministry has reviewed grain figures this year and no one knows for sure how much grain they have in store once inaccurate yield assessments, storage losses, rents are paid (in grain) and “shrinkage” has all finally been taken in to account, then I would treat these figures with caution.

.

The head of the Ukrainian Grain Union, Volodymyr Klymenko, forecast that grain exports would total about 15 MMT. With all due respect he would say that wouldn’t he.

He did go on to say a little more informatively that “exports might include 6 MMT of wheat, 4 MMT of barley and 5 MMT of corn”. Did you spot that small innocuous word “might” in there, changes the whole statement if you spotted it.

England might win Euro 2012.