MercoPress. South Atlantic News Agency

Russia admits crop loss of 38%; self sufficient in 2010 but no reserves for 2011

Deputy Agriculture Minister Alexander Petrikov

Russia has enough grain to cover its domestic needs after harvesting this year 38% less than the previous crop, a senior official said Monday. However markets believe Russia could be forced to import several million tons to ensure grain reserves until the following 2011 harvest

The world’s third-largest wheat exporter was hit by a severe drought in many producing regions that destroyed or diminished large parts of its crop and raised the issue of imports. Analysts have estimated imports of 1.5 million to 2 million tons may be needed, while a report from a Russian broker said the volume could be closer to 5 million tons.

However an Agriculture Ministry spokesman has denied the report. Deputy Agriculture Minister Alexander Petrikov said Russia had harvested 40.3 million tons of grain bunker weight by Aug. 19. He said that so far 19.3 million hectares or 48 percent of the sown area had been harvested with average yields falling to 2.08 tons per hectare from 2.69 tons per hectare a year ago, Aug. 19, 2009.

Bunker weight is normally 7 to 8% higher than clean weight obtained after grain is cleaned and dried. But the difference may be lower in hot and dry years like this one. Final crop outcome is calculated by clean weight.

Petrikov said Russia had sufficient grain to cover its needs. “I must say that Russia’s domestic needs are 77 million tons,” he said. “With stocks of some 23 million tons and intervention stocks of 9.5 million tons, these will more than cover domestic demand “.

Petrikov confirmed the ministry’s 2010 crop forecast of 65 to 67 million tons given an optimistic scenario and 60 million tons if a poor showing is confirmed.

Russia’s carry-over stocks, however, which had been previously estimated by the State Statistics Service at 21.7 million tons and by the Agriculture Ministry at 24 million tons as of July 1, already include the 9.5 million tons of intervention stocks.

With a crop of 60 million tons, carry-over stocks of 23 million and consumption of 77 million tons, as well as 3.6 million tons already exported, according to IKAR analysts, Russia will be left with carry-over stocks of just 2.4 million tons by the end of the current crop year on June 30, 2011.

Taking into account the need to allocate some 11 million to 12 million tons for winter sowing due to start in August, Russia appears unable to go ahead without imports. Russia currently has a ban on grain exports which should be lifted by December 31.

According to original planning Russia was planning to increase grain exports in 2010. Russia has been harvesting an average 100 million tons of grains with domestic consumption almost 80 million tons.
”The export of grain will be slightly more than in 2009 and reach about 22-22.5 million tons” said First Vice-Prime Minister Viktor Zubkov

Russia has a substantial export potential on the international grain markets and can continuously export up to 30 million tonnes of grain a year, Zubkov said.

Russia exported 23 million tones of grain in 2008 and 20 million tones in 2009. “I think we can continue to export volumes within that range of 23-25 and up to 30 million tonnes,” he said.