KIEV, Oct. 13 ??“ Foreign and domestic investors may be hurt by the government??™s recent decision to restrict grain exports, as major sea ports have already suspended handling the shipments, causing severe railroad traffic jams.

Odessa, Illichivsk and Kherson, Ukraine??™s main grain handling ports, reported hundreds of cargo railroad cars stuck as traders had not been able to move their grain for exports due to the imposed restrictions.

Western diplomats late last week sought clarification from the Agriculture Ministry after many investors complained the restrictions had been causing major losses.

The measure to restrict grain exports is the first seriously anti-market step imposed by the government of Prime Minister Viktor Yanukovych since he had taken the job in early August and may delay Ukraine??™s accession to the World Trade Organization, analysts said.

???The grain traders are now facing $400,000 in losses per day,??? Leonid Kozachenko, president of the Ukrainian Agrarian Confederation, a farm lobby group, told Kommersant newspaper. ???This may well delay Ukraine??™s accession to the WTO.???

Ukraine planned to join the WTO before the end of 2006, but comments from Yanukovych in August suggested that the government may seek to take more time.

The government??™s decision to restrict the exports come at a time when grain prices have been rising on world markets following reports that bad weather had reduced grain harvests in the US and other major grain producers.

Ukraine, the world??™s sixth biggest grain exporter, emerged as a big player on the international grain markets in recent years suggesting the restrictions may have global implications, analysts said.

The government several months ago forecast Ukraine??™s grain exports at 13 million metric tons in the marketing season from July 2006 through June 2007, on par with the previous season. Traders signed contracts to export about 3 million tons between July and early October, but not all of this grain had yet been exported, industry analysts said.

Ukraine is expected to produce about 35.3 million metric tons of grain that will be sold in the marketing season between July 2006 and June 2007, down from about 40 million tons that been forecast in July.

The lower grain harvest was one of the reasons why the government had decided to suspend the exports in early October, Agriculture Ministry officials said.

The exports are now allowed by those traders that have obtained special licenses from the government. The traders complained that allocation of licenses had been very slow, leading to jams and other problems at the ports. (nr/ez)