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IKAR in Mass Media

Russian ministers to discuss grain crop on Friday

27 августа 2012 года

MOSCOW/ST PETERSBURG, Aug 27 (Reuters) - Russian Deputy Prime Minister Arkady Dvorkovich, who coordinates farm policy, will discuss prospects for the drought-hit grain harvest with Agriculture Minister Nikolai Fyodorov on Friday, his spokeswoman said, as grain market participants mull the possibility of export restrictions.

A sharply reduced Russian 2012 grain crop forecast, which the government recently cut to 75 million tonnes, has sparked concerns Moscow might ban exports, stoking a rally in global prices.

Russia barred grain exports for almost a year in Aug. 2010 after a severe drought, the catalyst for a surge in grain prices and related political instability in the import-dependent Middle East and North Africa regions.

This year Russia's wheat harvest may fall below the crop of 2010, when the country harvested 41.5 million tonnes of wheat.

SovEcon agricultural analysts expects Russia's 2012 wheat crop to slip to 39 million tonnes as drought hits yields.

An Agriculture Ministry representative, contacted by Reuters, was not aware of the agenda for Friday's meeting. Leading Russian analysts and some traders expect officials to continue to monitor the situation but to take no immediate action.

"They are unlikely to take any abrupt decisions regarding exports," Dmitry Rylko, head of the Institute for Agricultural Market Studies (IKAR), said.

Andrei Sizov Sr., Chief Executive for SovEcon agricultural analysts, said: "They are likely to say that we will continue to monitor the situation. Decisions will not be taken."

The government will have to rely on the Agriculture Ministry's forecasts, which are more optimistic than those of some independent analysts, added Sizov.

"They have to look at the ministry's estimates, which expect Russia to harvest 75 million tonnes and see carryover stocks at 18 million tonnes. The picture is fine for them," Sizov said.

International traders and analysts remain wary, widely expecting limits to be imposed in some form, perhaps as early as November, after heavy exports in the early months of the season showed Russia could exhaust the 10-12 million tonne exportable surplus sooner than Jan. 1.

Fyodorov repeated comments made last week, ruling out an export ban. "We will use only civilized and effective mechanisms to protect the domestic market," he told reporters on the sidelines of the conference AgroRus in St Petersburg on Monday.

SovEcon's Sizov forecasts Russia's 2012 grain crop at 71-72.5 million tonnes, down from last year's 94 million tonnes.

Local analysts have also indicated that the government will hold off making sales from its 5-million tonnes grain interventions stock now, as domestic price growth in the drought-affected Urals and Siberia has slowed.

The government has previously indicated that export tariffs could be an option, though only after the end of the calendar year.

Source: Reuters  |  #grain   |  Comments: 0   Views: 44

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