MOSCOW (Reuters) — Russia, one of the world’s top wheat exporters, may increase grain exports over the next marketing year, partially due to crops in the Crimea region, the head of Russia’s Grain Union, Arkady Zlochevsky, said on Monday.
Russia’s decision to annex Ukraine’s Crimea peninsula has resulted in the most serious East-West confrontation since the end of the Cold War. Both countries ship grain mainly to North Africa and the Middle East via the Black Sea.
Russia is expected to harvest at least 90 million tonnes of grain in 2014, of which 25 million tonnes will be available for export during the 2014-15 marketing year starting on July 1, Zlochevsky told a briefing.
Russia’s agriculture ministry expects the 2014 grain crop at 95 million tonnes and sees 2013-14 grain exports at 22 million tonnes.
Zlochevsky’s estimate included Crimea which would be able to export at least 500,000 tonnes, flat year on year, the head of the lobby added. Crimea harvested 1.3 million tonnes of grains in 2013.
Zlochevsky declined to estimate the size of Crimea’s 2014 grain crop, but said a major part of it is likely to be exported as shipping it to the European part of Russia would be logistically complicated.
His 2014 grain crop forecast for the whole country is based on expectations of favourable weather, on which Russia’s crop will be more dependent this year due to possible difficulties with spring grain sowing which started several weeks ago, he said.
“There is a list of factors which add risks to spring grains sowing,” he said. “The level of preparedness (for the spring grains sowing campaign) looks weak.”
He said that seed quality was worse than last year and that some banks had cut limits for loans which may be approved for farmers by their regional offices without a confirmation from the central office to $2.83 million from previous 150 million, he said.
This decision, made by the banks, hampers the ability of farmers to get financing, according to Zlochevsky. He said the limit reduction was unrelated to political factors or the Russian rouble weakening since early 2014.
He added that a large part of the annual state support has yet to reach farmers as funds remain on accounts of regional governments.
“All these factors will increase dependence on weather conditions,” he said. He said favourable weather conditions would make up for the lack of technology and the lack of financing.
Crimea may be not able to sow 100 percent of the area planned for spring grains this year, he said, while the capacity of its three grain terminals is unlikely to be fully used until difficulties with grain supplies from Russia are resolved.
He did not say how much capacity these terminals have.