December 6, 2010

Russia to fasten grain imports to ease drought-hit regions

Russia may be forced to expedite grain imports and sales from state stockpiles to ease tight supply in drought-hit regions, according to SovEcon.

"Massive imports as well as intervention sales may ease the tension," SoyEcon analysts said. The government may be forced to begin sales from a stockpile of 9.64 million tonnes earlier than planned, SovEcon said. Sales could begin in March, according to the country's Agriculture Ministry.
 

Russia, which lost 38% of its grain crop in this year's drought and banned exports since July 1, is encountering difficulties delivering surplus grain from seven regions in the south and Siberia to the drought-hit areas, SovEcon said. Feed-grain supply is particularly tight, and the fodder is frequently being substituted by milling wheat, analysts said.

Growers in Siberia are increasing grain prices on limited supply and ahead of permission on flour exports from January 1, SovEcon said. Deliveries from three southern regions to drought-hit regions in central Russia and along the Volga River are logistically challenged and further complicated by the risk of spreading African swine fever, it said.

Russia has asked several countries to reserve grain for possible deliveries. Prime Minister, Vladimir Putin, said Russia may need to import as much as five million tonnes, mostly for feeding cattle, according to an estimate by the Grain Producers' Union.