July 13, 2010

 

Russia's grain surplus expected to reach 20 million tonnes despite drought

Russia may be able to export around 20 million tonnes of grain in the current 2010/11 crop year started on July 1 even if a severe drought slashes output, according to the Russian Grain Union.

 

Arkady Zlochevsky, president of the union, told reporters he agreed with the official 2010 grain crop forecast of 85 million tonnes, including 55-58 million tonnes of wheat, but added that if the drought persisted there could be more losses.

Nevertheless, he was confident that Russia could export some 20 million tonnes under any circumstances. He said with record carry-over grain stocks of 24 million tonnes, output of 85 million, consumption of no more than 77 million and exports of 20 million, Russia will still have sufficient carry-over stocks of 12 million tonnes at the start of the new season.

 

At the start of every crop year, the country needs some stocks left from the previous year to cover its needs before the new harvest grain starts pouring in.

 

Agriculture Minister Yelena Skrynnik, told Prime Minister Vladimir Putin later that the official crop forecast could be revised downwards as the drought persisted, but domestic consumers would not be damaged.

 

"We have to make another calculation," Skrynnik said. "Subject to revision may only be our export potential," she added without providing more detail.

 

Zlochevsky said the government was planning to provide help to farmers who suffered damage from the drought.

 

He said grain plantings are so far estimated to have been lost on nine million hectares of land out of some 48 million sown for this year's crop.

 

A state of emergency has been declared in 14 regions because of the drought and another four could follow suit shortly, Zlochevsky said.

 

He said the government planned to agree with banks an extension of current loans to farmers, as well as additional cheap loans and to provide to animal breeders feed grain from the government stocks with a five-year repayment delay.

 

Zlochevsky said the union was still lobbying for export subsidies for grain especially for cereals produced in Siberia, but he had less hope of obtaining them because of the drought. But he said he had more hope that the government could cut railway fees and transhipment costs for Siberian grain.