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IKAR in Mass Media

Russia's Siberia grain harvest may fall 30 pct in 2012

20 августа 2012 года

MOSCOW, Aug 20 (Reuters) - Grain yields in drought-stricken Siberia, key to Russia's export potential this year, are likely to fall by about a third from last year, adding to pressure on Russia's government to keep grain in the country.

Early harvest data from the Siberian Federal District, a vast administrative territory which covers about a third of Russia, led to downgrades of the overall Russian harvest outlook by agricultural analysts IKAR and SovEcon.

Traders believe Russia will limit exports this year to prevent domestic shortages and the attendant threat of inflation after a drought in the U.S. sparked a rally on grain markets.

The government has tried to reassure markets there will be no repeat of August 2010, when Russia's snap decision to ban grain exports after a major drought shocked markets, but Deputy Prime Minister Arkady Dvorkovich, in charge of agricultural policy, has warned the government's view may change, especially if Siberia's harvest is poor.

Siberia's wheatfields, thousands of kilometres from Russia's main export ports and frostbound for at least half the year, are rarely a deciding factor on world wheat markets.

Largely cut off from export by the cost of shipping grain from Siberia to outlets on the Black Sea, the region normally produces a surplus of high quality milling wheat which is sent to neighbouring areas as well as Moscow and St. Petersburg.

FALLING YIELDS

As of August 20, yields in the Siberian breadbasket region of Altai fell to about 1.1 tonne per hectare, with 27 percent of the harvest complete and 1.01 million tonnes of grain harvested, the regional agriculture ministry said.

As of August 15, the Omsk region got 0.92 tonne per hectare from 11.82 percent of its fields, with the south of the region worst hit.

"(Crops in the producing regions of) Altai, Omsk, Tomsk and Kemerovo have burned up. What good can there be in Siberia?" Dmitry Rylko, head of the Institute for Agricultural Market Studies (IKAR), who downgraded his overall harvest forecast to 73 million tonnes on Monday, said.

The SovEcon consultancy narrowed its forecast range to 71-72.5 million tonnes, lowering the upper limit from 74 million tonnes, without giving a regional breakdown. It had previously said Siberia's wheat output would fall to 7.2-7.7 million tonnes from last year's output of 9.79.

Pavel Skurikhin, chief executive of Novosibirsk-based agribusiness firm SAHO, which also has farms in central Russia and the Black Sea region, said yields could improve as the harvest progresses if high wind and rain do not interfere.

High winds are a risk in many of Siberia's producing regions, while the Omsk region, among Siberia's hardest-hit producers, is likely to see heavy rainfall and possibly hail, the state weather forecaster said on its website.

"In the Novosibirsk region SAHO's farms are in line with regional averages. With 58 percent of the harvest complete, overall grain yields are 1.15 tonnes per hectare, while they were 1.5 tonnes last year," Skurikhin told Reuters.

"Siberian producers have only started harvesting wheat, so the yield picture is not yet indicative," Skurikhin said. "SAHO's farms started with the fields worst affected by drought, and the yields there are about half of planned levels."

Novosibirsk's regional agriculture ministry said on its website the harvest would amount to 2 million tonnes of grains, and the region would also receive 120,000 tonnes from the state intervention fund.

This year, however, the drought may leave some of the region's major milling centres with barely enough grain to meet their own demand.

"The harvesting campaign just started. The crop will be enough to cover local demand but will leave very little wheat to ship out," said a Siberian trader, estimating yields throughout the region could fall to 1 tonne per hectare from 1.5 last year.

That could force the government to decide between shutting off exports and forcing Russia's millers to compete for dwindling supply on domestic and perhaps export markets.

"Everyone who can be bothered is buying in relatively well-off central Russia, and will keep buying until the bitter end," SovEcon Chief Executive Andrei Sizov said.

Analysts said the gap left by Siberia is likely to be partly filled with increased volumes from Kazakhstan.

"St. Petersburg could even look to Germany," said Sizov.

Source: Reuters  |  #grain   |  Comments: 0   Views: 45

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