August 3, 2010

Russia's grain production may decrease 26%

The country's grain production may fall 20-26% to 72-78 million tonnes in 2010 amid the worst drought in decades, according to Russian Grain Union president Arkady Zlochevsky.

Russia's 2009 harvest totalled 97 million tonnes.

The Russian Grain Union predicts three possible scenarios for development of the grain market. In the worst-case, Russia will harvest only 72 million tonnes and export 11 million tonnes, while reserve stocks will amount to 10.4-14.4 million tonnes. In the cautiously optimistic scenario, the harvest will amount to 75 million tonnes and exports to 14 million tonnes, while reserves will total 10.4-14.4 million tonnes. In the best-case, Russia could harvest 78 million tonnes of grain and export 19.5 million tonnes while reserves will stand at 7.9-11.9 million tonnes.

Grain imports in any case will amount to just 0.4 million tonnes.

With domestic consumption of 71-75 million tonnes and reserve stocks of 24 million tonnes as of July 1, Russia's predicted grain harvest in 2010 will suffice to meet the country's grain needs, and there were no grounds for bread price hikes in Russia, Zlochevsky said.

The drought has destroyed crops on an area of 10 million hectares or 20% of Russia's cultivated land, according to the latest data.