November 13, 2012

Russian grain sales' possible expansion from government intervention stocks will depend on the winter crop outlook.

Deputy Prime Minister Arkady Dvorkovich said during a government meeting on Monday (Nov 12), "The situation with the harvest forecast is unclear now, we need to wait for another two or three weeks to see if we can expect a good winter crop, and then decide whether to expand the interventions now. Otherwise, we can face a grain deficit during the spring, which we cannot allow."

Russia, historically the world's number three wheat exporter, was hit by hot and dry weather this year, which slashed its wheat harvest by third and sent domestic wheat prices to record level. Its official exportable surplus of 10 million tonnes of grain has already been exhausted but some shipping continues.

The country has already exported 11 million tonnes of grain, including 8.5 million tonnes of wheat, since the start of 2012-13 marketing year, or between July 1 and November 8, Russia's Institute for Agricultural Market Studies (IKAR) said earlier on Monday (Nov 12).

Last week, Russia's miller's union asked the government to ease conditions for importing wheat from Kazakhstan and rye from Germany this spring to cover a possible shortage after this year's drought.

Russia aims to sell up to 1.25 million tonnes of grain this year from its five-million-tonne stocks. The Russian government plans to sell up to 130,000 tonnes of grain per week from October 23 until the end of the year.

Meanwhile, dry weather is causing concern for the state of winter grain crops in some parts of Russia's south, the country's main exporting region. But rains could have improved the situation last week, the map of the state crop weather forecaster showed on Monday (Nov 12). As of November 7, 93% of the country's winter grain sowing campaign was completed, the National grain union said in a note.