The ministry proposed no revision to the grain harvest forecast for 2007, which currently stands at about 38 million tonnes.

Earlier on Friday, weather forecasters said about 60 percent of crops sown to the 2007 harvest were suffering from a drought which could depress the harvest. [ID:nL25180334]

"As of May 23, the area hit by drought reached about 60 percent of the total sown area," Mykola Kulbida, head of Ukraine's meteorological centre, said in a statement published in the official gazette.

He said severe drought was likely to continue over the next five to seven days and that would worsen the state of the crops.

"We do not forecast any changes in weather in Ukraine by the end of the month. The drought is to continue, daytime temperatures will reach 28-36 Celsius. As a result we see a worsening of the drought and an increase in the affected area."

Kulbida gave no grain crop forecast, but analysts said on Thursday that each day of drought would reduce the harvest by about 250,000 tonnes.

Ukraine harvested 34.25 million tonnes in 2006.

Leading agriculture consultancy UkrAgroConsult said this week it had revised the 2007 wheat crop outlook to between 16 and 17 million tonnes from the previous estimate of 17.7 million.

It also reduced the barley harvest forecast to 9.5-9.7 million tonnes from 10.3 million a month earlier.

RESTRICTIONS

Analysts and officials have said drought could force the government to roll back on a decision to lift wheat export quotas -- adopted last week but yet to be published.

"There is a lot of talk on the market about the quotas. Traders are nervous that the abolition of wheat export quotas could be suspended," a trader told Reuters.

The government in late 2006 introduced export quotas to avoid a jump in bread prices. Restrictions were lifted last week after protests from traders and international organisations.

"There is no reason to worry about the quotas. The decision has been made," an agriculture official said.