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July 11, 2012


Black Sea region grain projections reduced due to arid weather



Russia, Ukraine and Kazakhstan have been forced to slash their projected grain outputs and the Black Sea region's total grain harvest could be at least 35 million tonnes lesser than in 2011, due to the arid weather during most of the growing season.


Russia, hit by severe drought first in the southern breadbasket regions and then in Siberia, could lose 10 to 15 million tonnes this year against 2011.


Six weeks of rain followed the spring drought in Russia's south, casting further doubt on yields in the main export regions.


Ukraine, which faced a record drought during the 2011 winter grain sowing, is likely to almost half its wheat harvest to 12 million tonnes from 22.3 million tonnes a year earlier, while Kazakhstan's output could fall to 14 million tonnes from 27 million tonnes.


Russia's SovEcon consultancy said last week that it had revised down its 2012 forecast to 80 million tonnes from the previous estimate of between 80 million tonnes and 85 million tonnes because of a smaller-than-expected grain yield in the Volga region.


"The grain yield in the Volga region is 20% to 30% smaller than at the start of harvesting last year. The region could harvest 19 million tonnes of grain, but not 21 million tonnes (as in 2011)," Andrei Sizov, president and CEO of SovEcon, told Reuters.


SovEcon expects the wheat harvest to total about 46 million tonnes, down 10 million tonnes on last year. However, further downgrades are possible if incoming harvest data warrants them, it added.


"There are some worries about Altai despite last week's rain," Sizov said.


Analysts also said that they did not expect the recent torrential rains in Russia's southern region of Novorossiysk to have any significant impact because the harvest is already formed, though spring crops could be affected.


"Rains complicate harvesting in southern regions, but the situation there is clear - about 50% of the planted areas had been already harvested," Sizov noted.


Kazakhstan, the Black Sea region's top producer of hard wheat, said on Tuesday (July 10) that it had reduced its outlook for the 2012 grain harvest to 14 million tonnes from a record 27 million tonnes in 2011.


Anna Buts, director of the agriculture ministry's land development department, told reporters that a drought in southern parts of the country was the reason for the decrease in production.


The latest forecast falls below the ministry's previous crop estimate of between 15 million tonnes and 16 million tonnes.


"There is no indication yet of a large-scale drought. For now, the drought is only in southern regions," Buts said.


Ukraine, which suffered from drought during the sowing and severe frost during the winter, expects a 20% fall in grain output this year.


The country's agriculture ministry expects a harvest of about 45.3 million tonnes against 56.7 million tonnes last year. Analysts and weather forecasters predict output of no more than 44 million tonnes.


The consultancy UkrAgroConsult reduced its forecast on Tuesday, estimating Ukraine's 2012 grain harvest at 43.4 million tonnes, down from 45.5 million tonnes, because of a smaller-than-expected corn crop.


UkrAgroConsult's forecast for the wheat harvest remained unchanged at 14.18 million tonnes, but it reduced its corn crop forecast by 5.6% to 20 million tonnes. It cut barley harvest outlook by 10.9% to 6.5 million tonnes.


It said that corn crops were predominantly in good or satisfactory condition across most of Ukraine in late June.


However, it added that plants in the southern regions, where productive soil moisture in the one-metre layer fell to a poor level, were drooping in the daytime and would form a low grain yield if the drought persists.


"Part of the crops may fail to develop cobs and will be cut for silage," it said.

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