Spreading drought is forcing major Black Sea grain exporters - Russia, Ukraine and Kazakhstan - to cut their outlook for 2010 production plans again, which indicates their exportable surplus may shrink. Russian Agriculture Minister Yelena Skrynnik is scheduled to give a rare live interview to Ekho Moskvy radio later on Thursday which will be closely monitored by farmers and market players for any crop forecast update as harvesting continues.
Skrynnik told Prime Minister Vladimir Putin earlier this month an official forecast for this year's crop may be cut to below an earlier forecast of 85 million tonnes, already reduced from a previous 88-90 million. She has not provided new a forecast since but local and international grain markets are hungry for any steer on the likely outcome of the harvest after one of the worst droughts in Russian history.
The Russian Grain Union, a powerful industry lobby, has said the crop may be 81.5-85 million tonnes, while SovEcon agricultural analysts believe the crop may even shrink to below 75 million tonnes. Russia will still have an exportable surplus, analysts and officials believe. It had record grain stocks of 24 million tonnes at the start of the 2010/11 crop year on July 1, left from two previous bumper crops of 108 million and 97 million tonnes, and domestic consumption should be 77 million.
Estimates on the size of Russia's surplus vary, however. The Agriculture Ministry, which normally keeps the highest estimate, has recently agreed that the surplus may turn out to be lower than the initially expected 20 million tonnes.
Russia has so far harvested 21 million tonnes of grain, 0.7 million more than a year ago, but the picture is expected to change, as the bulk of the grain currently comes from regions largely unaffected by the drought.
UKRAINE, KAZAKHSTAN ALSO HIT The Ukrainian government cut its grain crop forecast for 2010 last week to about 42 million tonnes from previous 45.5 million, saying unfavourable weather in southern and eastern regions has reduced wheat and barley yields.
Severe winter frosts followed by record high summer heat and rainfall have destroyed crop on some 500,000 hectares sown with barley to 4.48 million hectares and reduced yields to 2.28 tonnes per hectare from 2.35 tonnes in 2009, analysts said.
They also said that the area sown with wheat had also been reduced by about 200,000 hectares to 6.46 million hectares this year and yields were likely to fall to 2.89 tonnes per hectare in 2010 from 3.15 tonnes in 2009.
The government says Ukraine, which consumes about 26 million tonnes of grain per season, is unlikely to face a shortage of food cereals as it has stocks carried over from the previous year of 5 million tonnes, including 2.5 million of food grains.
UkrAgroConsult consultancy last week also cut its grain crop forecast to 43.5 million tonnes from 45.2 million. It had cut the barley forecast by about 1.0 million tonnes to 10.2 million tonnes, and wheat forecast by 500,000 tonnes to 18.6 million.
Ukrainian farmers harvested 11.6 million tonnes of grain by July 19, 3.0 million less than at the same date in 2009. The volume includes 6.6 million tonnes of wheat.
Kazakhstan has also been forced to revise its official forecast downwards by one million tonnes. "The gross grain crop is forecast at 13.5-14.5 million tonnes," Agriculture Minister Akylbek Kurishbayev told a government meeting earlier this week. Kazakhstan harvested a record 20.8 million tonnes of grain in 2009.
Earlier this month Deputy Minister of Agriculture Arman Yevniev said the country expected a decline in grain output to 14.5-15.5 million tonnes due to drought and larger area sown to this year's crop with oilseeds at the expense of grain.
Yevniev also said that the country's grain exports were expected to decline to 6.5 million tonnes in the 2010/11 crop year from 8.5 million exported in 2009/10.
RAINS HIT BULGARIA Smaller producer Bulgaria is also expecting a decline in crops as it was hit by a different calamity - rains. Bulgaria lowered last week its estimate for this year's wheat crop to 3.5 million tonnes due to extensive rains from the previously expected 4.0 million tonnes. Heavy rainfall in the recent weeks have made it impossible to start harvesting in almost all regions of the country.
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