IKAR in Mass Media

Ikar Cuts Russian Grain Crop Estimate by 2.7% Due to Drought

01 июня 2012 года

May 18 (Bloomberg) -- Russia's grain crop will be 91 million metric tons, 2.7 percent lower than forecast last month, because of drought in southern regions, the Institute for Agricultural Market Studies said.

The Moscow-based institute had estimated the new crop at 93.5 million tons in April. The harvest may include 54 million tons of wheat and 15.4 million tons of barley, Oleg Sukhanov, head of market analysis at the institute, known as Ikar, said by phone.

Exports will be 21 million to 22 million tons next season, which starts on July 1, down from 27 million tons this season, he said. If lack of rain persists in the south, the crop estimate may be lowered to 90 million tons, Sukhanov said.

The Southern federal district may lose the most, or up to 20 percent compared to 2011 and harvest about 18 million tons in 2012, according to Ikar. The area accounted for more than 24 percent of the country's grain crop last year and will account for 80 percent of grain exports, it said.

Wheat exports from the southern federal district will fall to 13 million tons next season from 19.5 million tons this season, Sukhanov said. Barley exports may drop to 1.3 million tons from 2.2 million tons, he said.

Russia's Exports

"The global grain market would definitely be affected if Russian exports shrank," said JeniaUstinova, associate at Eurasia Group, by e-mail.

Wheat surged to the highest price since early February, heading for the biggest weekly increase in 21 months, on speculation that dry weather in the U.S. and the Black Sea region will hurt crops and limit production.

Wheat futures for July delivery gained 3.2 percent to $6.785 a bushel at 10:05 a.m. on the Chicago Board of Trade, after reaching $6.80, the highest since Feb. 1. The price has gained 14 percent this week, heading for the biggest weekly gain since August 2010.

Viktor Zubkov, acting first deputy prime minister, reported drought in the south on May 16, saying crops were damaged. Drought may also be developing in the Black Earth regions of Voronezh, Tambov and Kursk and the Volga area, Sukhanov said.

The government doesn't plan to lower the harvest estimate because farmers can replant damaged crops, Zubkov said. The Agriculture Ministry's crop estimate is similar to last year. In 2011, Russia harvested about 94 million tons of grain, including 56.2 million tons of wheat and 16.9 million tons of barley, according to the state statistics figure.

Source: Bloomberg | #grain | Comments: 0 Views: 39

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