October 4, 2010

 

Russian 2010 grain crop expected at 60-63 million tonnes

According to separate estimates given by agricultural officials Friday (Oct 1), Russia's 2010 grain crop could be between 60 million and 63.1 million tonnes.

 

Agriculture Minister Yelena Skrynnik said Russia may harvest 63.1 million tonnes of grain this year while First Deputy Prime Minister in charge of agriculture Viktor Zubkov gave an estimate of 60 million tonnes.

 

Zubkov's forecast is in line with analysts' estimates of a crop of 59-60 million tonnes and an earlier Agriculture Ministry's forecast of a little above 60 million tonnes.

 

An Agriculture Ministry's statement distributed to reporters on Friday (Oct 1) said Russia had harvested 60.1 million tonnes of grain by October 1. It did not give a year-ago comparison, and did not indicate whether the data was by clean or bunker weight.

 

"The number made public today - of 60.1 million tonnes by clean weight - is not final. The grain harvesting is proceeding in Siberia, rice has not yet been harvested. Therefore we can well harvest another three million tonnes," Zubkov said.

 

Clean weight, obtained after cleaning and drying the grain is some 6% lower than the bunker weight. The crop data are normally given by bunker weight during the harvesting, while the final crop figure appears by clean weight.

 

Russia imposed a ban on grain exports from August 15 to December 31 after a severe drought decimated crops. The country harvested 97 million tonnes in 2009 and 108 million in 2008.

 

Analysts and government officials have estimated that Russia, until recently a major grain exporter, will not only be unable to ship the grain out, but it will also need to import three to six million tonnes of cereals.

 

Zubkov said on Friday (Oct 1) the government sees no reason to lift the ban until July 2011, when the new crop year will start. Earlier, a diplomat said the ban could be lifted this year.

 

But Skrynnik said Russia expects to have sufficient grain to cover domestic needs.

 

"The expectations that we will have a shortage of something will not prove to be true, as we have stocks of 26 million tonnes including at backyard farms. Taking into account consumption of 77 million tonnes we will have carryover stocks," Skrynnik said.

 

Simple calculation shows that, based on a crop of 63 million, stocks of 26 million and consumption of 77 million, and estimated exports which took place before the ban of 3.6-3.8 million tonnes, Russia may have carryover stocks of 8.2-8.4 million tonnes by July 1, 2011.

 

Arkady Zlochevsky, president of the Russian Grain Union industry lobby, said Friday (Oct 1) that according to UN Food and Agriculture Organisation standards carryover stocks should be no lower than 12% of annual consumption.

 

But analysts and traders say that in fact the beginning stocks on July 1, 2010 were not 26 million tonnes, but 17-20.5 million. If this proves to be true, this will leave Russia with little or no carryover stocks on July 1, 2011.

 

"The crop, officially estimated at 63 million tonnes, will in fact be three to five million bigger," Zlochevsky said.