Russian Crop Risk Seen ‘Amplified’ by Oil World on Recent Rains

Recent excess rains and hail in southern Russia have “amplified production risks” for the country’s crops after some areas suffered from heat and dryness earlier in the season, said Oil World, an oilseeds researcher.

Russia’s total grain crop may fall below 80 million to 85 million metric tons in the 2012-13 season, compared with 94.2 million tons a year earlier, the Hamburg-based researcher said today in an e-mailed report. The country’s export potential in the year that started July 1 may be 16 million tons, down from 28 million tons in 2011-12, Oil World said.

“Given the prospective decline of grain production in the major growing regions of southern Russia, a large part of this season’s export supplies will have to be sourced from remote areas,” Oil World said. Logistical expenses may hinder the country’s competitiveness on the world market, it said.

Rains may have improved the prospects of corn and sunflower crops in Ukraine, while coming mostly too late to boost wheat and barley crops, Oil World said. Wet weather also has raised concern about the quality of the country’s rapeseed crop.

As of July 17, Ukraine had harvested rapeseed on about 356,000 hectares (880,000 acres), with production totaling about 762,000 tons and yields of 2.14 tons per hectare, Oil World said.

“Even though the 2012-13 Ukrainian rapeseed crop is going to exceed our original forecast, it will still fall short of last year’s production and will be the smallest in five years,” Oil World said. “Rapeseed production has been on the decline since 2008-09, mainly owing to the elevated weather-related risks.”

To contact the reporter on this story: Whitney McFerron in London at wmcferron1@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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