August 31, 2010

 

Russia sees significantly lower 2010 grain crop

Russia's 2010 grain harvest is expected at around 62-63 million tonnes, sharply lower against on-year due to drought, deputy economy minister Andrei Klepach said Monday (Aug 30).

 

The figure is in line with the official Agriculture Ministry forecast of between 60 million and 67 million tonnes for this year, compared with the 97 million tonnes harvested in 2009. Some analysts expect an even lower crop.

 

However, Klepach said there is cause for optimism over next year's crop, without elaborating.

 

Russia's 2011 crop may be below average as some key producing regions were unable to start the winter grain sowing in time because of lack of soil moisture. Winter grains account for roughly 40% of the total grain crop in Russia.

 

Klepach said that Russian grain imports may reach three million tonnes in the current crop year ending in July 2011.

 

"Imports will not rise much. Maybe to three million tonnes," Klepach said. In 2009/10 Russia imported some 400,000 tonnes of grain.

 

SovEcon agricultural analysts, who expect the 2010 crop to be around 60 million tonnes have said that Russia may have to import up to six million tonnes.

 

The Institute for Agricultural Market Studies (IKAR) expects imports to be no less than 2.2 million tonnes.

 

Drought has also pushed up inflation, which had previously been seen at 6-7% this year after 8.8% in 2009.

 

"The ministry has significantly revised the forecast for inflation. We see it at 7-8% in 2010, but most probably it will be 7.5-7.8% December to December," Klepach said.

 

He added that net capital outflow could reach US$10 billion this year, followed by a similar-sized net inflow in 2011.