By Aleksandras Budrys and Pavel Polityuk
MOSCOW/KIEV (Reuters) - A fresh warning that up to a
third of Russia's next winter wheat crop might lie fallow until
the spring renewed fears that the Black Sea's drought could eat
into next year's harvest as well as cut wheat supplies this year.
The outlook for crop problems into 2011 is tempered by ample
stockpiles after record world wheat production in both 2008 and
2009. U.S. wheat futures retreated for the fourth time in
six sessions, ending the week down 3 percent after nearly doubling
since late June.
Russian First Deputy Prime Minister Viktor Zubkov said the
sowing area for winter grains for the 2011 crop may fall by one
third to 12 million hectares, citing an Agriculture Ministry
"Therefore, 6 million hectares will have to be sown with
spring grains," Zubkov told reporters after a governmental
commission meeting on the drought.
Zubkov also said a ban that is about to halt Russia's grain
exports and is designed to restrain domestic food prices amid its
worst drought in more than a century will not be lifted earlier
than its Dec. 31 expiry.
That contrasted sharply with comments from Russian President
Dmitry Medvedev who said on Thursday the ban could be lifted
before its planned Dec. 31 expiry, depending on the harvest. Prime
Minister Vladimir Putin has said it could last into 2011.
Other exporters such as the United States and Europe should be
able to easily fill any trade gap left by grain export bans in the
Black Sea region, traders said.
Putin quizzed the head of the anti-monopoly watchdog, Igor
Artemyev, on whether the ban was already restraining food price
"Hang on ... I would like to get it right for myself. So you
think that there was still a certain rise (in prices) and you are
not seeing any fall?" Putin asked in a meeting.
"We do not see it yet. The export ban announcement of course
should have had a positive impact on price stabilisation inside
Russia, we are expecting it as an economic trend but do not see it
yet," Artemyev said in a transcript posted on a government
UKRAINE LOSES GROUND TOO
The sowing of winter wheat traditionally starts in August. The
winter crop accounts for 90 percent of Ukraine's total wheat
harvest, and in Russia winter grains account roughly for 40
percent of the grain total.
Ukraine is poised to decide next week on proposals to impose a
limit on its exports.
The country harvested 28.5 million tonnes of grain as of Aug.
13, 20 percent less than at the same date a year ago, a local news
Ukraine's weather forecasters said there was no reason to
start winter sowing until the end of August because the upper
level of the soil had no moisture.
"The situation with winter sowing will not be favourable by
the end of August," Anatoly Prokopenko, deputy director of the
Ukrainian Hydrometcentre government weather forecasting service,
"Ukrainian southern and eastern regions will stay without
rains, while insignificant rains could fall on other parts of the
country," he said.
Elsewhere, Hungary's almost completed wheat crop came in at
3.72 million tonnes by Aug. 11, down 16 percent from last year and
a fifth below the five-year average, the agriculture ministry
Hungary's crop has also been hit by adverse weather, including
floods earlier this year. The reduced crop also reflects decisions
by farmers to plant less wheat for this harvest than previously.
(Additional reporting by Gleb Bryanski in Moscow, writing by
Veronica Brown and Lisa Shumaker in Chicago; editing by Jim