May 27, 2011
Russia to reap 52.7 million tonnes of wheat
Russia's wheat crop will bounce back to 52.7 million tonnes this year, a 27% rebound from the previous year, when a drought destroyed the crop and caused the government to terminate shipments, according to a Reuters poll.
The total grain harvest, was forecast on average at 86 million tonnes, a rebound of 41%, the poll showed, suggesting a rebound in wheat production will lag the overall recovery in Russia's agricultural industry.
The majority of wheat crop forecasts including those from the USDA, the Food and Agriculture Organisation (FAO) of the UN and top Russian analysts were concentrated in the 53-55 million tonnes range.
The Russian Agriculture Ministry does not give a separate wheat forecast.
However, Arkady Zlochevsky, head of Russia's Grains Union, a powerful industry lobby, told the Reuters Black Sea Grain Forum on Wednesday (May 25) that an increase in the area sown to oilseeds this year meant the wheat crop would be smaller, at 47-48 million tonnes.
Analysts said other producers are also moving to corn, which gives a higher yield by weight and was in tight supply last year.
Domestic consumption last year was 47 million tonnes, although Zlochevsky said his forecast left room for exports.
Even at higher forecast levels, analysts said, actual exports were likely to fall short of the exportable surplus.
The USDA, which earlier this month forecast a wheat harvest of 55 million tonnes, said 10 million tonnes would be available for export.
"It will need to cover its own domestic demand and rebuild its stocks," an analyst who forecast 4-4.5 million tonnes in exports said.
The prospects for a healthy grain harvest in Russia, until last year's drought the world number three wheat exporter, are seen likely to guide government in deciding when to lift or extend the export ban, formally in effect until July 1.
With elevators in key exporting regions full to bursting and domestic prices at low levels, Russia's farm lobbies, traders and analysts are asking the government to ease restrictions and a three month exemption from July is seen likely.
Though wheat is Russia's most important agricultural export, wheat supplies have been more than adequate, while feed grains, particularly corn and barley, have been in tight supply.
The resulting meat and dairy price inflation is likely to remain a concern this year, with parliamentary elections due in December 2011 and a presidential poll scheduled for March 2012.
Russia's Agriculture Ministry is among the most bullish forecasters, with a forecast of 85-90 million tonnes in total.
That would leave an exportable surplus of at least 15 million tonnes, short of the record 18 million tonnes exported the previous year.
