MOSCOW (Dow Jones) — Russia’s Ministry of Agriculture Thursday lowered its forecast for the 2012 grain harvest to 75 million metric tons, down from an earlier projection of 75 million to 80 million tons.
“Today it is likely that it won’t be as much as 80 million tons, but more likely closer to 75 million tons,” Agriculture Minister Nikolai Fyodorov said in an interview with the Rossiya-24 television.
This is the third time the ministry has lowered its estimate this year since drought conditions began sweeping through a wide swathe of the country’s southern grain-producing regions. Last year, Russia harvested a record crop of 94.2 million metric tons of grain.
In 2010, a severe drought and widespread wildfires resulted in a harvest of just 60.9 million tons which led to an export ban. The Russian government has said it has no plans to repeat such a ban this year.
Mr. Fyodorov noted that Russia still maintains grain reserves of roughly 17 million tons and given that domestic consumption is forecast at 72.7 million tons, there will be sufficient surplus for export.
“We are confident in the export potential of grain and wheat, in particular,” he said. “We do not expect any more disturbing news.”
Analysts said the announcement came as little surprise and did not expect that it would affect prices.
“They simply narrowed the expectations to the low end of the range, but the market has already been pricing towards the more conservative estimates,” said Mikhail Krasnoperov of Troika Dialog. “This is not a negative deviation.”
Source: Dow Jones
Posted by Haylie Shipp
