November 25, 2010

Russian grain stocks seen depleted by 2010-11 marketing year-end

Russia's grain stocks may be nearly depleted by the end of the current marketing year on June 30, 2011, because this summer's drought has resulted in a small harvest, Pavel Skurikhin said Wednesday (Nov 24).

With a considerable shortfall in the area planted with winter grain, this year's harvest would be about 60 million tonnes. There would be between 21 and 26 million tonnes left over from last year's harvest, said Skurikhin, president of the National Union of Grain Producers. He is also chairman of the Board of Directors of the Siberian Agrarian Holding.

The country consumes 77 million-78 million tonnes of grain in a marketing year, so by the end of the marketing year there will be very little grain left in the country, he added.

The 2011 harvest is not likely to bring much relief because winter grain has been planted on 3.5 million to four million hectares less than expected, and a corresponding increase in the spring grain planted area was not likely.

He added that the normal amount of grain stocks at any given time should be 10 million to 12 million tonnes, equalling two months of consumption. As a result Russia would have to import at least five million tonnes of grain before the end of the current marketing year.

Skurikhin said the greatest need would be for feed grain, especially barley and corn. Barley could be imported from Kazakhstan and corn from Ukraine. Although these two countries have also suffered from the drought and prices were relatively high there, Russia would save money in transportation costs importing grain from them rather than the more distant countries outside the Commonwealth of Independent States.

He said most of the grain would be imported by private operators while the Russian state operator, the United Grain Company, would only be responsible for the grain imported under inter-state agreements.