July 13, 2011
Black Sea grain crops rebound
Eastern Europe's grain crops are expected to pick up this year because of favourable weather that will assist the Black Sea powerhouse prepare for a surge in exports.
Last year Russia lost over a third of its grain crops in the worst drought in decades, prompting the government to ban exports for a year, while Ukraine's cereal crop production dropped by a sixth.
Harvesting is now in full swing across the grain-exporting region, and its top producers are heading for bumper crops, while smaller players Romania and Bulgaria should also increase output.
Analysts have said a boost in Black Sea exports could be bearish for prices, although any drop may be softened by concerns about falling harvests in other producers including Western Europe, where rains have been meagre.
French analyst Strategie Grains has slashed its forecast for crops in the EU due to renewed dry conditions in the Western part of the bloc.
Major buyers from the Black Sea region include Egypt, Turkey, Jordan, other Middle East countries and the EU.
Russia, which expects to harvest up to 92 million tonnes of grain, up from 61 million in 2010, has reaped 4.6 million tonnes by bunker weight since the start of the campaign, with yields rising by a hefty 27% to 4.2 tonnes per hectare.
Analysts see its exportable grain surplus at 15-20 million tonnes. Russia was able to export 18 million tonnes of wheat in the pre-drought 2009/10 season and 2.8 million tonnes of barley.
In Ukraine, harvesting progress has also been hampered by torrential rains, but farmers have already got 5% of an estimated bumper production of 45 million tonnes, above last year's 39 million tonne output.
First Deputy Prime Minister Andriy Klyuev said winter and spring crops would suffer in a number of regions. "But, according to preliminary estimates, potential losses can be compensated thanks to improving condition of planted corn," he added.
Agriculture Minister Mykola Prysyazhnyuk said that the official forecast includes 19.1 million tonnes of wheat, eight million of barley and 15.5 million of corn.
This season Ukraine will be able to export up to 10 million tonnes of wheat, 3.2-3.3 million tonnes of barley and 8.1 million tonnes of corn, UkrAgroConsult analysts said.
In 2010/11 Ukraine exported 12.1 million tonnes of grains.
"We remain optimistic with regards to the wheat harvest," analyst Yelizaveta Malyshko said.
Smaller Black Sea grain producers Romania and Bulgaria also expect a recovery in cereal crops, with damage from adverse weather conditions earlier this year only marginal and a smaller volume of grain downgraded to feed quality.
Romania has harvested 2% of its two million hectare acreage, and wheat yields hovered at 3.6 tonnes per hectare.
"What we have seen so far looks very promising. Harvesting is to end in a couple of weeks, and we are optimistic wheat will be 6.7 million tonnes this year," a farm ministry expert handling crop data said.
That would mean an output 18% higher than in the previous season. Romania also foresees a corn crop of more than 10 million tonnes, up about 15% on the year due chiefly to a larger acreage, the second-biggest crop in the EU after France.
Romania is the EU's most inefficient grain producer with average yields at about 3.3 tonnes per hectare, behind neighbours Bulgaria and Serbia due to poor investment, which keeps it exposed to weather extremes.
To the south, Bulgaria sees its wheat crop edging up to 4.1 million tonnes from four million in 2010, with around 90% of wheat and barley fields in very good and good condition, and with damaged zones less than 1%.
"Climatic conditions are better than last year's and the wheat should have better indicators. Better quality must receive better prices," said Radoslav Hristov, chairman of Bulgaria's National Association of Grain Producers.
"Let's hope that thanks to the better quality, we will be more competitive at the market."
"We expect the same crop, which means approximately the same quantity for export as last year, around two million tonnes."
