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31.05.2012

PRIME: Draught kills third of Russian winter crops, but weather favorable

Russia’s winter grains were lost on a third of the sown area, but anticipated fair weather can still improve the 2012 harvest, a Hydrometeorological Center source said Thursday citing preliminary data.

«As of today, the loss of winter crops amounts to approximately 25–30%... But the situation may change depending on weather conditions, which have recently improved and are expected to be favorable in summer,» she told PRIME.

Russia, one of the world’s top grain exporters, had sown 16.1 million hectares of winter crops, and the Agriculture Ministry forecasted the loss to be at an average level of 6–7%.

A recent dry spell prompted a number of companies to reduce their grain harvest predictions.

French agency Agritel cut the forecast to 50–53 million tonnes from 56 million tonnes, Russia’s Prozerno reduced its wheat harvest forecast 4.1% to 54.2 million tonnes.

Grain railway shipment firm Rusagrotrans revised its 2012 forecast to 82 million tonnes from 89 million tonnes.

In 2011, Russia harvested a bumper 93.9 million tonnes of grain.

The dry weather in Russia, exacerbated by draughts in the U.S. and Australia, also propelled international wheat prices up. Some media even speculated that Russia may introduce a grain embargo ban, like it did in 2010 after the worse draught ever killed about a third of its crops.

However, rains in Russia’s southern grain belt over the weekend later cooled the market down.

«The rains created a favorable background for the ripening of winter crops,» the source said.

Russia has only sown spring crops on 85% of the planned area.

«We do not expect a severe drought as in 2010. We forecast a hot and dry weather only in Siberia and the Volga Region so far this summer, while in other regions of Russia the center forecasts moderate rainfalls and temperatures of about 1% above average,» she said.

Russian Grain Union President Arkady Zlochevsky said the country may increase its grain exports to over 30 million tonnes in the 2012/13 agricultural season, which begins on July 1, compared to 27 million tonnes for the current season.

But IFC Metropol analyst Tatyana Yelizarova said that Russia’s infrastructure, which already exported 25,346 tonnes as of May 23, only allows handling of no more than 30 million tonnes of grain annually, while higher exports required investments in shipment capacity.

«As for domestic prices for grain, they might increase 10% this season but the change would mostly affect poultry producers and other farmers who need feed grain,» Yelizarova said.

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