March 28, 2011

 

Black Sea region sees 2011 grain crop jump allowing export

 

 

Farmers in the leading grain-producing areas of Ukraine and Russia will start mass planting in a few days and project a rise in the 2011 grain yield and a return to the productive export market.

 

But analysts and officials are now saying the increase may not be as large as predicted a few months ago.

 

A severe drought last summer left Russia without a third of its 2010 grain harvest, while Ukraine lost about 15% of grain crop compared to 2009.

 

Russia, formerly among world's leading exporters of wheat, banned grain sales for the 2010/11 season, while Ukraine, which used to be the world's major exporter of barley and a leading exporter of wheat and corn, imposed grain export quotas.

 

A snowy winter without extreme frost across the region has allowed Russian farmers to forecast a jump in the harvest to about 86-87 million tonnes from 60.9 million in 2010, but poor spring weather could cut the harvest to as low as 76 million.

 

In Ukraine, which used to forecast a jump in grain production to about 46 million tonnes this year from 39.2 million in 2010, the grain crop could rise to about 44 million or even to 41 million if the spring appears to be dry.

 

The Russian Grain Union, the top agrarian lobby, said it expected overall grain harvest to reach 86 million tonnes this year, up from 60.9 million tonnes in 2010, while a worst-case scenario would result in a 76 million tonne crop.

 

"If we add up all the risks, the harvest could decline by 9.9 million tonnes from the expected plan," the union's president Arkady Zlochevsky said.

 

Zlochevsky said that weather-related risks included the effect of late spring sowing, which has been delayed by about three weeks due to cold weather, as well as another drought.

 

A delay in sowing could lead to a fall in the harvest if the best window of opportunity for the campaign is missed, which could result in lower yields.

 

Ukraine, which had been forced to limit its grain shipments after Russia's export ban, plans for an increase in the grain harvest to 41-46.5 million tonnes this year, saying that weather in April and May will be critical.

 

"Final results will depend on weather in April-May. A dry April and May would mean that the harvest will not reach its maximum possible level," a large foreign trader said.

 

"As of today, we forecast the harvest of about 46.5 million tonnes, including 21 million of wheat," the trader said.

 

Top Ukraine analyst UkrAgroConsult has been forecasting this year's crop at 46.2 million tonnes but is likely to revise the outlook lower.

 

"We are considering revising the forecast to about 44 million tonnes. Winter crops are not as perfect as we had expected before," said Elizaveta Malysh from UkrAgroConsult.

 

She said winter crops were better than a year ago but that a delay in sowing could reduce the yield of spring grains.

 

Less optimistic Ukrainian officials have said the harvest could rise slightly to 41-42 million tonnes.