Ukraine, Kazakhstan Wheat Crops Seen Falling, FAO Says

Ukraine’s wheat harvest may slide 37 percent and Kazakhstan’s production could fall 36 percent this year after the crops were harmed by frost and drought, the United NationsFood and Agriculture Organization forecast.

Farmers in Ukraine may reap 14 million metric tons of wheat in 2012 down from 22.3 million tons last year, while Kazakh output may fall to 14.5 million tons from 22.7 million tons, the FAO wrote in an April 17 report published online today.

Bigger wheat crops in Russia, Ukraine and Kazakhstan last year boosted global supplies and weighed on wheat prices. Chicago-traded wheat futures have fallen 25 percent in the past 12 months, while milling wheat in Paris has declined 20 percent.

“In the Russian Federation and in Ukraine, export prices of milling wheat rose by 13 percent in the past four months, mainly due to concerns about the impact of dry weather on the 2012 wheat crop in Ukraine,” the Rome-based FAO wrote.

Russia is forecast to produce 56.8 million tons of wheat this year, increasing from 56.2 million tons in 2011.

Winter kill in Ukraine has been higher than normal because of severe cold in combination with limited snow cover, while some major production areas have been affected by drought since planting in the autumn of last year, according to the FAO. Wheat area and yields are expected to drop, it said.

“The most affected areas are expected to be replanted with other crops this spring,” the UN agency wrote.

Russian Crops

Winter-crop planting in Russia increased in response to high prices, and most crops in the country were protected by “ample covering” of snow, according to the FAO.

In Kazakhstan, wheat planting suffered from inadequate soil moisture, the FAO said. The country has an exportable wheat surplus of about 8.5 million tons after a record harvest last year, according to the report.

“However, due to its landlocked status and infrastructure constraints, the country continues to experience logistical difficulties in supplying wheat to the international markets,” the agency said.

Production of coarse grains, which includes barley, corn and sorghum, is forecast to slip to 32.9 million tons in Ukraine from 33.5 million tons last year, while Russia’s coarse-grain harvest may be little changed at 34.3 million tons from 34.2 million tons, the FAO predicted.

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

To contact the editor responsible for this story: John Deane at jdeane3@bloomberg.net

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