June 7, 2011

 

Russian 2010 grain losses may be exaggerated

 

 

Russia may have excess grain to export after farmers and officials overstated losses by up to six million tonnes last summer, according to the USDA Moscow attache on Monday (Jun 6).

 

Many regions reported a total wipeout of crops last summer in a bid to get government compensation after the worst drought to hit the country in more than a century devastated Russia's harvest.

 

But the USDA's attache said that in some regions yields may still have reached 0.2-0.3 tonnes of grain per hectare, meaning the 2010 harvest may have been three to six million tonnes more than the government figure of 61 million tonnes.

 

"Analysts point out that reliable, unbiased data on grain production is still absent in Russia," the report said.

 

Russian Prime Minister Vladimir Putin announced at the end of last month that Russia will allow grain exports as of July 1. The move has weighed on wheat prices as traders anticipated the arrival of some of the world's cheapest grain on the international market.

 

The USDA said analysts estimate Russia may export up to three million tonnes of the 2010 harvest and another 10-12 million tonnes from the upcoming 2011-12 harvest, depending on its size.

 

Observers said the decision to export has been prompted by the need to empty much-needed storage space ahead of the 2011-12 harvest, which the government forecasts could reach 85-90 million tonnes.

 

Some analysts estimated the country's carryover stocks at the end of the 2010-11 marketing year in June could be as high as 18 million-20 million tonnes. The USDA has forecast wheat and coarse grain stocks as 7.1 million tonnes, less than half the previous year's figure.

 

"Most of these stocks are concentrated at the elevators of the Southern, grain exporting provinces of European Russia, and will hamper storing of the new crop, which is estimated to be good in 2011," the report said.

 

The USDA said the extra stocks may have been bolstered by lower-than-expected domestic consumption, which was originally pegged at 77 million tonnes at the beginning of the 2010 calendar year but lowered to 67-86 million tonnes by the end as high domestic prices weighed on demand.

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