August 17, 2012

Due to strong demand, Russia's grain farms started the 2012-13 marketing season with stocks at historically low levels, reflecting fears of a possible ban on Russia's grain exports.

"High level of sales by farmers indicates strong demand from buyers, especially exporters, and, obviously, indicates they are stockpiling," Russia's SovEcon consultancy said on Thursday (Aug 16).

A global crunch in grain supply intensified on Wednesday (Aug 15) with high prices failing to dampen consumers' appetite while supplies from key exporter Russia appeared to be in danger of running out before the end of the year.

The tightness in Russian supplies, after drought caused a sharp drop in yields this season, has led to talk that the government may impose export restrictions with quotas, tariffs or even an outright ban.

Russian grain stocks at farms stood at 15.73 million tonnes as of August 1, their lowest level since 2006, SovEcon said, citing data from the Federal Statistics Service, or Rosstat.

Wheat stocks fell to their lowest level since 2003 to stand at 10.61 million tonnes.

Grain stocks were down 18% on year, while wheat stocks were down 30% after the sales volume increased by 60%.

Grain stocks in Krasnodar and Stavropol, located in Russia's main export region, halved.

Russia's exportable grain surplus of 10 million-11 million tonnes could run out by November if exports stay high in coming months, SovEcon said on Wednesday (Aug 15).