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Russia's grain stocks less than reported -trade

15 сентября 2010 года

MOSCOW, Sept 9 (Reuters) - Russia, its harvest savaged by an extended drought, is holding far less in carryover stocks of grain from last year than the government is reporting, analysts and traders said on Thursday.

The Kremlin and top economic officials have been at pains to reassure the public, which is already feeling the inflationary effects of the drought and is worried about shortages, despite a ban on grain exports that will last at least until the end of the year.

The Agriculture Ministry this week increased its carryover stocks estimate to 26 million tonnes from 21.7 million in the latest of a series of conflicting data and statements, which have frustrated traders and markets. The more likely figure is 17-20.5 million tonnes, traders and analysts said on Thursday, with a majority of estimates in the 17-18 million tonne range.

"If stocks were 26 million tonnes at the start of the season, prices would have fallen," said a Western trader who estimated stocks at 17 million to 18 million.

"I believe that stocks are in fact around 20.5 million tonnes," said the head of the ProZerno analytical unit of WJ trading company, Vladimir Petrichenko.

The Institute of Agricultural Market Studies (IKAR) puts carryover stocks at 18 million tonnes, with wheat making up about 12.1 million tonnes.

"We do not see the 26-odd million tonnes ... and the market does not see them either," IKAR head Dmitry Rylko told a grains and oilseed conference hosted by the Russian Grain Union and IKAR.

EXTENDING THE BAN?

With the harvest set to fall by over third from 97 million tonnes last year, Russia has imposed a grain export ban to ensure stable domestic supplies. It may extend the ban to sunflower seed and crude sunoil exports.

One analyst, however, cautioned against writing off Russia as an exporter even as others predicted imports of Russia's staple grains, such as rye.

"I see our (2010/11) exportable surplus of 5, 6, maybe 7 million tonnes," Petrichenko said, based on his harvest forecast of 65.1 million tonnes and carryover stocks of 20.5 million.

Deputy Agriculture Minister Sergei Korolyov told the conference the harvest would be around 60 million tonnes, near the bottom of the official 60-65 million range of forecasts.

"If prices rise after the new year, the government will be an active participant and will damp them down by selling intervention stocks," he said.

"On feed grain, it has been decided that it will be sold to regions that suffered in the drought at 2008 purchase prices. A decision on feed grains will be taken shortly."

He reiterated that the export ban is likely to remain in force until the 2011 harvest begins. Winter sowing is under way, and despite inadequate rain, he said Russia could probably avoid the worst case scenario of 12 million hectares of sown area.

"It will be 16-17 million hectares," he said.

RUSSIA'S LOSS, OTHERS' GAIN

Poor sowing weather and lack of rain was again forecast in southern breadbasket regions on Sept 10-12, while Siberia is expected to see mild precipitation in coming days, the Hydrometcentre weather forecasting centre said.

Russia, which classed itself until this year as the world's third largest wheat exporter, had aimed to double exports and planned billions of dollars in infrastructure investments to handle a huge increase in volume.

In the meantime, however, Russia's ban has played into the hands of European rivals such as France, which are already selling to traditional Russian clients in the Middle East, and the United States, which is in the midst of a bumper harvest.

U.S. wheat exports may rise to as much as 37 million tonnes in the 2010/11 year from 24 million in 2009/10 after Russia imposed a ban on its grain exports, a U.S. Wheat Associates senior official said on Thursday.

"Tomorrow we will produce another calculation, and I will not be surprised if it comes with 36-37 million tonnes," Vince Peterson, vice president of overseas operations, said.

"Our strategic orientation is to develop grain production and exports," Korolyov said. "The drought will pass and we will restore volumes."

Source: Reuters  |  #grain   |  Comments: 0   Views: 43


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