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Russia and Ukraine face lower grain crops in 2018 due to dry weather

Reuters, 23.05.18


KIEV, May 23 (Reuters) - Russia and Ukraine, major global grain exporters, may face slightly lower grain crop than last year's record production due to dry weather in some of their regions, analysts and weather forecasters said.

Russia and Ukraine export their grain to customers in Africa and the Middle East mainly via the Black Sea.

Russia harvested a record grain crop of 135 million tonnes in 2017 and a large crop of 61 million tonnes came from Ukraine.

Rains seen in Russia in the last two weeks significantly eased risks of drought, SovEcon agriculture consultancy said, adding that the level of moisture in soil is still relatively low in some regions.

It currently expects Russia's 2018 grain crop at 126 million tonnes in 2018. Another consultancy, IKAR sees it at 120 million tonnes.

Russia's spring grain sowing, 60 percent completed so far, is delayed due to cold weather in Siberia and Urals regions. However, the situation is good in Russia's south, the main breadbasket, where the sowing is running ahead of last year's pace.

Among the main grain exporting regions in the area, Krasnodar and Volgograd are currently expected to keep their grain crop flat this year with a small decline expected in Rostov and Stavropol regions, according to an estimate of a Russian trader.

Rains are still needed in Crimea and the western part of Rostov region, said Anna Strashnaya, an analyst at the agricultural department of Hydrometcentre. "But the situation is satisfactory in general so far," she added.

"The Agriculture Ministry is currently standing by a conservative forecast for 2018 grain crop of 110 million tonnes. With such crop, grain exports will be only slightly lower than a year ago due to the stockpile," it added.

Last year, the ministry was far more pessimistic about the 2017 crop than the majority of analysts until the last minute probably hoping to constrain the fall in prices with low forecasts.

Ukraine's Agriculture Ministry said it kept its forecast for grain crop unchanged at 61 million tonnes with grain yield expected at 4.4 tonnes per hectare, 4 percent above last year's level.

"We do not expect a record (crop) yield," said Yelizaveta Malyshko at consultancy UkrAgoConsult.

According to her, dry weather affected the crop during its formation in some regions and the current rains will not be able to fix the situation.

UkrAgoConsult recently downgraded its forecast for 2018 barley production by 350,000 tonnes to 7.4 million tonnes but raised its estimate for maize (corn) by 900,000 tonnes to 26.6 million tonnes as it hopes that some farmers will switch to this cereal.

Its forecast for wheat crop remains unchanged at 26.3 million tonnes.



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