Winter freeze fuels fear of wheat price jump Ukraine has warned that freezing temperatures sweeping across eastern Europe have damaged about a third of its winter wheat crop, threatening to send wheat prices higher. With temperatures plunging below minus 30ºC in some regions, there is widespread expectation that the winter harvest will need to be reseeded. The price of wheat has gained ground as agricultural consultants have revised down their production figures for the season. Mykola Prysyazhnyuk, Ukraine's agriculture and food minister, said wheat farmers were facing a "pretty difficult" situation concerning the winter crop, adding that about 33 per cent of the planted crop had been affected by the harsh winter weather. The freeze comes as grain traders watch closely announcements from Moscow and Kiev over a possible decision by the two governments to ban grain exports. Exports from the Black Sea region, including Russia and Ukraine, kept global prices in check in 2011 as markets faced the prospect of reduced crops in the US and South America. Wheat prices softened on Friday after the Russian government said there was no need for grain export restrictions in April, and that exports for the 2011-12 crop year would total 27m tonnes, a sharp rise on the 3.7m in the previous season, when the authorities placed an export ban on grains. Ukraine is also unlikely to limit exports unless there is a "rapid surge in global export demand for its wheat," said the agricultural ministry. However, there is still uncertainty about the winter crop because of the unusually harsh winter weather. ProAgro, a Kiev-based agricultural consultancy, forecast that Ukraine's 2012 harvest would "fall by 25 per cent - to about 42.6m tonnes - compared to the 2011 result of 56.7m tonnes." In a note to clients, it blamed "low moisture and colder than usual temperatures," which were not optimal for planting and growth of the winter crop. Analysts said the winter harvest had already been hit by weather damage in the autumn. Some expect Ukrainian farmers may need to reseed up to 40 per cent of the winter harvest in the spring. Sergey Feofilov, general director of Ukrainian agriculture consultancy Ukragroconsult, said the wheat harvest was expected to fall 30 per cent to 14m tonnes in 2012, down from 20m last year. He added that, given the uncertainty over export restrictions, it was easy for the government to politicise food price levels. We will most likely be left guessing until the last minute. I would not risk predicting the outcome now. Prices of European milling wheat for March delivery in Paris fell on Friday after the Russian announcement, edging down 0.8 per cent in late trade to €207.75, but still at the highest levels since September last year. Christopher Gadd, grains analyst at Macquarie, said the extreme winter weather was a short-term bullish factor for wheat prices on two fronts. It will cause problems with the dormant new crop, but more importantly it causes logistical issues in the Black Sea region, limiting grains exports.