The fallout from hostilities in eastern Ukraine is continuing to take a toll on the country's grain production even as tensions appear to be calming.

The influential analysis group said it was preparing to lower by 1.1m tonnes to 57.4m tonnes its forecast for the Ukraine grains harvest.

The proposed revision reflected reduced expectations for corn output, seen at 25.9m tonnes, 1.1m tonnes lower than previously forecast, a reduction down largely to crop losses to the conflict in eastern Ukraine between government troops and Russia-backed, separatist fighters.

"In our opinion, some 25% of corn plantings in Donetsk region and some 30% in Luhansk region have been damaged by the warfare and are unsuitable for harvesting," the Kiev-based group said.

Yield decline

However, the national yield result has been a bit lower than last year too, the results from the first 19% of the harvest, which has produced nearly 4m tonnes.

So far the average yield is "down 13% from last year".

While harvest yields are likely to increase – typically, Ukraine yield results rise even into late November, nearly at the end of harvest – "the final corn crop will nevertheless be lower than in 2013".

Ministry downgrade

The downgrade second this week for Ukraine grains output, after the farm ministry reduced its forecast by 3m tonnes to 60m tonnes.

The ministry, while failing to give the reason behind the downgrade, did say that the downgrade factored in crop damage from fighting in the east of Ukraine, besides the loss of Crimea, annexed by Russia earlier this year.

The downgrades nonetheless come amid some signs of an easing in eastern Ukraine tensions, with Nato on Wednesday saying it had a observed a "significant" withdrawal of Russian troops from the region.

Ukraine forces and separatist fighters have since September 5 operated a, somewhat shaky, ceasefire.

Ukraine's weakened harvest hopes represents a, rare, setback to world grains production hopes this year, with the European Union and Russia seeing bumper production, and the US exported to report a record corn crop.

Source - http://www.blackseagrain.net/