IKAR in Mass Media

Russia, Ukraine wheat output 'to drop 10m tonnes'

05 ноября 2014 года

Poor weather and the knock-on effect of devaluing currencies will cut Russian and Ukrainian wheat output by a combined 10m tonnes next year, Macquarie said, as market attempt to gauge the scale of a problem which has supported world prices.

The bank said that wheat production in Ukraine will fall by some 3m tonnes to 22.0m tonnes next year, hurt largely by the impact of the country's crisis, including in weakening the hryvnia, and raising the cost of inputs such as diesel and agrichemicals.

"The planting campaign this autumn has been around 20-50% more expensive for Ukrainian farmers, driven by the hike in fuel and input costs amid tremendous currency devaluations," Macquarie analyst Colin Hamilton said.

Furthermore, with Ukraine's crisis hurting the country's banks, "lending to farmers has become nearly impossible", Mr Hamilton said.

"Without financing, farmers will struggle next year to produce the crop that they achieved this season."

Vulnerable to frosts

Weather was not such a concern, "yet", for Ukraine, with autumn-sown grains, while slow to develop thanks to cold weather, "in good condition", and "likely to develop a good resistance to frost", the bank said.

However, in Russia, crops face threats not just from the depreciated rouble, which will result in farmers seeking lower-quality seeds and scrimping on applications of agrichemicals, but dry and cold weather too.

"The early arrival of snowstorms and cold temperatures has made crops vulnerable to frosts as plants have not had enough time to develop properly before the winter," Mr Hamilton said.

While early November should see warmer temperatures "the longer-term weather forecast remains concerning though, as temperatures look set to drop further.

"Already the Russian meteorological centre has warned of abnormally low temperatures in the upcoming winter, increasing the risk of losses from winterkill."

Production estimates

Macquarie pegged Russia's 2015 wheat harvest at 54.0m tonnes, down 7.5m tonnes year on year on its estimates, although higher than some other initial estimates for the crop.

Ikar, the Moscow-based consultancy, said last week that Russia's 2015 wheat harvest could fall to 46.5m tonnes, from production this year it estimated at 58.5m tonnes.

Rival SovEcon has said that the harvest could fall below 50m tonnes, from a harvest this year it sees at 58-59m tonnes.

Source: Agrimoney.com | #grain | Comments: 0 Views: 103

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