May 27, 2009

Spain's winter grains harvest will fall 21.4 percent due to expectations that recent dry weather will cut yields.

The Ministry for the Environment and Rural Affairs forecast the winter grains harvest, mainly wheat and barley, would fall to 15.35 million tonnes from 19.54 million tonnes last year.

But Spain is seen as incapable of meeting domestic grain requirements and is expected to import eight million tonnes in the current crop year to meet the shortfall.

Dealers said it is too early to predict whether imports will need to increase to offset the poor harvest, as animal feed demand is low and merchants expect a carryover stock of more than four million tonnes.

Winter grain acreage fell 8.5 percent due to a collapse in grain prices late last year, farmers said, adding that yields would fall because the use of costly fertiliser had been reduced.

Rainfall in April and May was also disappointing, and the region of Castilla-Leon - which produces half of Spain's grain - is expected to produce 45-percent less wheat and 47-percent less barley than last year.

Leading farm union Asaja expected total grain harvest, including corn, to reach 15.4 million tonnes, while grain merchants' association Accoe expected 13.5 million tonnes.

Spain's grain harvest last year was a bumper 23.2 million tonnes.

If current warm conditions persist along with a lack of rainfall, the drop in yields will be even more significant, Accoe said.