Russian Farm Ministry Cuts Grain Export Target, Shuns Curbs

Russia, the third-biggest wheat exporter last season, cut the upper band of a September target for grain shipments by 29 percent to 10 million metric tons, while the government maintained there’s no need to curb exports.

The country’s grain shipments exceeded 8 million tons from July 1 and are expected to increase by about 2 million tons, Agriculture Minister Nikolai Fedorov told reporters in Moscow today. The ministry estimated exports at 10 to 14 million tons on Sept. 19, and Deputy Prime Minister Arkady Dvorkovich forecast shipments of as much as 12 million tons on Aug. 8.

“I was and I remain categorically against any kind of curbs,” Fedorov said. “So far everything remains as announced. We will monitor the market intervention and exports.”

Wheat has rallied 33 percent in Chicago this year as droughts from Russia to the U.S. destroyed crops. Russia may harvest up to about 40 million tons this year, Fedorov said. That’s less than the 41.5 million tons in 2010, when the country’s worst drought in a half century spurred a 10-month ban on exports.

About 5.5 million hectares of crops were destroyed by drought this year, causing more than 14 billion rubles ($450 million) in farm damage, Fedorov said.

Average grain yields are worse than in 2010, at 1.88 tons per hectare (2.47 acres), and 19 percent less than last year, Fedorov said. Still, the grain crop, measured after drying and cleaning, may come above 71 million tons, he said. The Moscow- based Institute for Agricultural Market Studies forecasts 68 million to 71 million million tons, down from 94.2 million tons last year. The wheat crop is estimated to be 37.5 million to 38.5 million tons, the institute, known as Ikar, said by e-mail today. That will be the lowest since 2003, data from the U.S. Department of Agriculture show.

Corn, Barley

The corn crop is forecast to be 7 million to 8 million tons and 4 million tons have been harvested to date, Fedorov said. Barley is seen at about 14.5 million tons, he said.

Farmers have harvested 71 million tons of grains, including 39.2 million tons of wheat, measured before drying and cleaning, Fedorov said. The rice crop reached 1 million tons from 70 percent of the sown area, up from 600,000 tons a year earlier, he said.

Some of the remaining grain crop may be lost during the harvest due to rainfall in the past three weeks in parts of the Far Eastern, Volga and Central federal districts, he said.

Farmers may also keep about 3 million tons of grains from official statistics in order to secure compensation payments for the impact of the drought, Fedorov said.

Economy Minister Andrei Belousov said Sept. 21 that new export curbs can’t be ruled out amid dry weather this year, while Dvorkovich has said there’s no need to restrict shipments. Russia will start intervention in the domestic market on Oct. 23 and may sell about 1 million tons of grain from state stockpiles by the end of 2012, Fedorov said. The state stocks hold about 5 million tons of grains, he said.

To contact the reporters on this story: Marina Sysoyeva in Moscow at msysoyeva@bloomberg.net; Maria Kolesnikova in London at mkolesnikova@bloomberg.net

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

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