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Russian Grain Exports to be Maintained

6 August 2012, at 9:44am

RUSSIA - Russia's agriculture ministry narrowed down its estimate for its drought-hit harvest to 80m tonnes last week but Prime Minister Dmitry Medvedev says it will be able to maintain an exportable grain surplus.

The ministry has cut its estimate from a previous 80-85m tonnes and expects a 2012 exportable surplus of 12m tonnes.

But there are fears the estimate may have to be cut further, to 75m tonnes, and this is fueling speculation over possible disruption to the country's grain exports. Russia banned grain exports in August 2010 when drought ruined crops.

Russia has already harvested 26m tonnes of grain this year. The total grain and legumes harvest of 80m tonnes and its stock of 16-17m tonnes would allow it to cover domestic demand, which is estimated at 70-72m tonnes.

Russia's southern breadbasket regions have seen persistent rains after a spring drought, but dry weather persisted in Siberia and the Volga regions. Yields have fallen to 2.3 tonnes a hectare from last year's 3.3 per tonnes as a result.

Russia exported 1.13m tonnes of grains, including 975,000 tonnes of wheat in the first three weeks of July this year.

Concern over poor harvest yields have pushed wheat prices higher in Russia's eastern regions despite stable prices in key export south regions, adding to speculation that the government may be forced to sell part of its stock.

The terms of state grain interventions should be set shortly. From April to June Russia sold about 2m tonnes of grain in state interventions and still has about 5m tonnes in its stock.