June 12, 2007

Poland's 2007 grain crop seen up sharply

Poland's grain production may rise to 27.5-28 million tonnes this year from 21.7 million in 2006 despite a spell of poor weather, a national farm research institute said on Monday (June 11).

Wieslaw Lopaciuk, leader of the grain market team at Warsaw's Farm Research Institute (IERIGZ) said the market has already enough supply to cover its needs despite the short-term drought.

Over the last two years, production by the biggest central European grain producer fell from a record 29.6 million tonnes in 2004 after summer droughts and floods damaged crops.

Lopaciuk said Poland is seen to start the 2007/08 season with reserves of some 0.5 million tonnes and hopes the new crop would help rebuild depleted stocks.

The research institute expects Poland purchase around 1.5 million tonnes this year, half of what had to be brought in last year, but still above average of one million tonnes.

Lopaciuk said exports could rise to 1.0 million tonnes from 900,000 last season, particularly of wheat, rye and corn and imports mainly high-quality durum wheat and malting barley.

Polish wheat is trading at around 630 zlotys (US$219.1) per tonne. The IERIGZ forecasts that in September, just after harvest, the price will fall to 410-450 zlotys per tonne.

The agency expects prices for rye to fall at a slower pace to around 430-460 zlotys per tonne from current 590 zlotys, as demand is high and sources are scarce.