July 31, 2012

Russia's grain prices rise further on lower yield outlook

Russian grain prices continue to grow as a reduced crop forecast prompted exporters to start stockpiling the commodity.

The highest price increase took place in the Urals, where the harvest forecast was halved in two regions due to drought.

"This, as well as high prices, encourages exporters to purchase grain in the Central Federal District. It pushes prices up in the European part of Russia, given the general situation with the 2012 grain harvest in the Russian Federation," the National Grain Producer Union said Monday (July 30).

Earlier in July, the Federal Service for Hydrometeorology reduced its 2012 grain harvest forecast to 77-80 million tonnes from 83-86 million tonnes. The Agriculture Ministry, which bases its forecast on the forecast of the service, cut its projections to 80-85 million tonnes from 85 million tonnes.

As of July 26, the country's grain harvest amounted to 24.8 million tonnes, a 2% on-year decrease.