PARIS/MOSCOW (Reuters) — Recent warm weather did not eliminate risks for Russia’s fragile winter grain plantings, said the agriculture consultancy SovEcon.
It warned of a potential export de-cline next year from one of the world’s key supplies.
An early cold spell this autumn has weakened winter grain crops in Russia, which is expected to be the world’s third largest wheat exporter in the 2014-15 marketing year after the European Union and United States.
“Despite warm weather last week, crops still remain depressed,” Andrey Sizov Jr., managing director of SovEcon, said Nov. 6.
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“We expect high winterkill and lower yields than the average level of recent years.”
Relatively warm weather forecast for November is likely to help plantings, first of all in southern Russia, he added. Farmers have already seeded 99.5 percent of the planned area, which is 40.5 million acres, up from 35.8 million acres at the same date a year ago.
According to SovEcon’s own estimate, the country’s 2015 grain crop could fall to less than 90 million tonnes, including less than 50 million tonnes of wheat. This year, the country has harvested 108.3 million tonnes of grain before drying and cleaning.
With a wheat crop of about 50 million tonnes, the country’s exports could fall to 16 to 18 million tonnes in 2015-16 from 23 million tonnes forecast this year, he added.
The fall in the ruble, which has lost about a quarter of its value against the dollar this year because of a decline in oil prices and a crisis in Ukraine, is also adding to risks for next year’s crop.
“Additional concern for the 2015 crop is the cost of inputs which is likely to go up significantly due to the ruble depreciation,” Sizov said.
Some farmers prefer to hold their crops because of the falling ruble and are selling sunflowers when they need cash.
Their mood may change around February or March, when they need cash for the spring sowing campaign, he added.
The weak ruble continues to make exports more attractive and may cause Russia’s wheat exports to exceed 23 million tonnes, according to SovEcon.
Wheat of Russian origin has lost the latest two tenders of GASC, Egypt’s state buyer, but SovEcon expects that to change in future tenders.
The consultancy estimates Russia’s November grain exports at three to 3.2 million tonnes compared with 3.1 million tonnes in October.
According to SovEcon, Russia may supply more grain to Iran this year because neighbouring Kazakhstan is having problems with grain quality this year.
Kazakhstan, Central Asia’s largest producer of grain, could lower its 2014-15 export forecast because wet weather has dented quality this year.
Russia exported 14.6 million tonnes of grain, including 12.1 million tonnes of wheat, between July 1 and Oct. 29.
