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Russia's grain market debates impact of drought

07 июня 2012 года

GELENDZHIK, Russia, June 7 (Reuters) - Russia's Agriculture Ministry sought to assuage market concerns about potential drought damage to the grain harvest, putting it at odds with leading grain market players who see a smaller crop and reduced exports for the 2012/13 marketing campaign.

The Agriculture Ministry insists that concerns about damage from the drought have eased and is retaining its forecast for a grain harvest of 94 million tonnes in the new season, flat year-on-year, a deputy agriculture minister said on Thursday.

"Our forecasts haven't changed and are not likely to change. We estimate the harvest at 94 million tonnes. Yes there were concerns, but we think they have passed because it has rained," Deputy Minister Ilya Shestakov said at the Russian Grain Union's XIII International Grain Round on the Black Sea. "So for now, we are not changing our forecast," he added.

Economy Ministry official Lyudmila Tyazhelnikova also said that ministry had forecast exports of 22-23 million tonnes of grain next season from a harvest of 92-94 million tonnes.

But Russia's Institute for Agriculture Market Studies (IKAR) and Russian Grain union as well as other players said they expected output and exports to fall in the coming season.

Global wheat prices rose in May on concerns that adverse weather in the world's top suppliers - the United States, Russia and Australia - was affecting output. Early June rainfall in the key grain-growing regions of Russia and Ukraine has made the market more optimistic.

IKAR General Director Dmitry Rylko said on Thursday that the institute now forecast Russia's 2012/13 grain crop at 88.4 million tonnes, down from this season's 94.2 million.

Exports could amount to 19.3 million tonnes, down from 27.4 million tonnes in the current season, Rylko said. Wheat exports are forecast at 14.8 million tonnes in 2012/13, with closing grain stocks seen at 14.3 million tonnes.

Russian Grain union expects the 2012/13 grain crop at 87.7-91.3 million tonnes, while exports could amount to 19-23 million tonnes, down from 27.1 million tonnes in the current season.

Closing grain stocks may fall to 18.5-18.9 million tonnes from this season's 19.4 million tonnes, Rudolf Bulavin, head of the analytical department of Russian Grain told the conference.

LOSSES

For the current season, ministry official Shestakov said exports were likely to hit 27.5 million tonnes by the end of June, the final month of the 2011/2012 crop year.

"We have already exported 25.7 million tonnes, of which 20.4 million was wheat," Shestakov said.

"Russia will be in the top three world wheat exporters. According to the Russian Agriculture Ministry's estimate, the United States will export 27.5 million tonnes of wheat and Russia will export 21.2 million tonnes," he said.

IKAR's Rylko also said wheat exports to Russia's main markets - Egypt and Turkey - are expected to reach record levels during this season, which will end at the end of June.

He said Russia has exported 26.4 million tonnes of grain between the start of the current 2011/12 season and the end of May, including 20.4 million tonnes of wheat.

Meanwhile, the Russian grain export business has consolidated, with the top 10 traders accounted for 67 percent of exports this season, 10 percentage points up from 2009/2010, Rylko said.

Rusargotrans expects a sharp rise of export shipments in the second half of 2012 to a level similar with the same period last year, when congestion forced Russian Railways suspended grain shipments to Novorossiisk, Russia's leading port for grain exports.

A representative of Agrotrans did not say whether that situation could occur again this year.

For others the situation looks not very good.

"Losses in Rostov will reach 20 percent, in Stavropol 25 percent," said a trader who asked not to be quoted by name.

Demand for the new crop will be strong and may start from a level of 8,000 roubles ($250) per tonne of fourth-grade wheat on a carriage-paid-to (CPT) basis.

SovEcon said the purchase price of wheat with 11.5 percent protein content in Russian deep-water ports rose to 7,800 roubles per tonne last week on a CPT basis.

Russia's sunseed harvest is expected to fall to 8.36 million tonnes in 2012/13 from 9.7 million tonnes in 2011/12, the head of ProZerno Vladimir Petrichenko said, adding that the forecast could be raised if June weather is favourable.

The soybean harvest, he added, is expected to reach 1.81 million tonnes in 2012/13, up from 1.76 million tonnes. ($1 = 32.4375 Russian roubles)

Source: Reuters  |  #grain   |  Comments: 0   Views: 80

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