Russia, Ukraine winter crops hit by dry autumn

The condition of winter crops in Black Sea region grain growers Russia and Ukraine are worse than last year due to a dry autumn and the new harvest is unlikely to exceed 2014's record level, analysts and traders said. Russia's 2015 grain crop prospects look weak due to the poorer winter grain conditions and a 40-percent slump in the value of Russia's rouble currency which has led to export curbs, higher credit rates and higher import costs, analysts and an industry lobby group said.
The rouble fall, caused by weak oil prices and Western sanctions over Moscow's role in the Ukraine crisis, forced the government to curb exports with informal limits in December. An export tax will come into force on February 1. "This results in a situation of a decrease in spring sowing area and use of simpler technology, which will inevitably lead to a decline in the 2015 crop," Russia's Grain Union said recently.
Agriculture consultancy SovEcon has said Russia's grain crop may fall to 86 million tonnes in 2015. In 2014 Russia achieved the second largest grain crop in its post-Soviet history of 104 million tonnes helped by favourable weather. IKAR, another agriculture consultancy, has forecast the 2015 wheat crop at 50 million tonnes, down from last year's 59 million.
UKRAINE Ukrainian winter crops, also hit by a shortage of moisture during sowing, are looking a bit better than Russia's thanks to mild and wet weather in December and the first weeks of January, a senior weather forecaster said. "Unusually warm weather helps crops, giving them a chance to strengthen and develop," said Tetyana Adamenko, head of the agriculture department at Ukraine's state-run weather centre.
"Without force majeure the proportion of killed crops could be at an average annual level of 8 to 10 percent," she said, adding that a bigger sowing area for 2015 could allow farmers to get the crop close to last year's level. Farmers increased the area sown for the 2015 winter wheat harvest by around 7 percent after Ukraine harvested an all-time high harvest of 63.8 million tonnes in 2014.
Agriculture Minister Oleksiy Pavlenko told Reuters this month that Ukraine had a chance of harvesting a crop as good as last year's as conditions were similar. Analysts forecast warm weather in January and early February, but said there were still substantial risks.