April 25, 2012


Wheat production in Ukraine, Kazakhstan down on weather condition


After the crops were harmed by frost and drought, Ukraine's wheat harvest may slide 37% and Kazakhstan's production could fall 36% this year, the United Nations' Food and Agriculture Organisation forecast.


Farmers in Ukraine may reap 14 million tonnes of wheat in 2012 down from 22.3 million tonnes last year, while Kazakh output may fall to 14.5 million tonnes from 22.7 million tonnes, the FAO wrote in an April 17 report published online today (Apr 25).


Bigger wheat crops in Russia, Ukraine and Kazakhstan last year boosted global supplies and weighed on wheat prices. Chicago-traded wheat futures have fallen 25% in the past 12 months, while milling wheat in Paris has declined 20%.


"In the Russian Federation and in Ukraine, export prices of milling wheat rose by 13% in the past four months, mainly due to concerns about the impact of dry weather on the 2012 wheat crop in Ukraine," the Rome-based FAO wrote.


Russia is forecast to produce 56.8 million tonnes of wheat this year, increasing from 56.2 million tonnes in 2011. Winter kill in Ukraine has been higher than normal because of severe cold in combination with limited snow cover, while some major production areas have been affected by drought since planting in the autumn of last year, according to the FAO. Wheat area and yields are expected to drop, it said.


"The most affected areas are expected to be replanted with other crops this spring," the UN agency wrote.


Winter-crop planting in Russia increased in response to high prices, and most crops in the country were protected by "ample covering" of snow, according to the FAO. In Kazakhstan, wheat planting suffered from inadequate soil moisture, the FAO said. The country has an exportable wheat surplus of about 8.5 million tonnes after a record harvest last year, according to the report.


"However, due to its landlocked status and infrastructure constraints, the country continues to experience logistical difficulties in supplying wheat to the international markets," the agency said.


Production of coarse grains, which includes barley, corn and sorghum, is forecast to slip to 32.9 million tonnes in Ukraine from 33.5 million tonnes last year, while Russia's coarse-grain harvest may be little changed at 34.3 million tonnes from 34.2 million tonnes, the FAO predicted.