World Bulletin / News Desk
Falling yields are painting an even bleaker outcome than anticipated for Russia's wheat crop, while longed-for rainfall in Ukraine and Kazakhstan won't rescue drought-hit harvests across the Black Sea area, forecasters and analysts said on Thursday.
Declining yields in Siberia and the Urals region prompted Moscow-based analyst group SovEcon to cut its Russian wheat crop forecast to 39 million tonnes from 39-41 million tonnes.
"With a sharp decline in the contributions from Siberia and the Urals, estimates for the Russian wheat harvest are falling significantly - lower, perhaps, than even the most conservative market expectations," SovEcon said in a note.
Wheat yields in Siberia and the Urals have fallen below 1 tonne per hectare. Citing ministry data, SovEcon pinpointed yields in Chelyabinsk region at 0.6 tonnes per hectare and in Omsk region at 0.8 tonnes per hectare.
Parts of Siberia are expecting cold night-time temperatures over the next few days, as low as minus 2 degrees Celsius (28.4 degrees Fahrenheit), the Federal Hydrometeorological Centre said on its website in a weather forecast for Aug. 23-25.
It said the possibility of wildfires remained very high in the Novosibirsk and Altai regions, despite forecast rain.
Russian Agriculture Minister Nikolai Fyodorov forecast the country's grain crop this year at the lower end of its previous range of between 75 million and 80 million tonnes, saying trends in the weather were "not very favourable."
The minister did not give a new forecast for the wheat crop.
Russia had harvested about 50 million tonnes of grains as of Aug. 23, data published on the ministry's website, www.mcx.ru, showed.
Sharply reduced crop forecasts from Russia - which harvested 94 million tonnes of grain last year, including 56.2 million tonnes of wheat - have given rise to concerns the country might once again ban exports, helping drive global prices higher.
Benchmark global corn and soybean prices hit record highs this summer in a fierce rally, sweeping wheat up with them, as the worst U.S. drought in 56 years ravaged crops.
Russia banned grain exports for almost a year after a severe drought two years ago, the catalyst for a surge in grain prices and related political instability in the import-dependent Middle East and North Africa regions.
Fyodorov, who last week ruled out such a ban, reiterated his position in an interview with state TV channel Rossiya 24.
"We are categorically against any measures which would destroy the market," he said. "We need to make very cautious moves."
RAINFALL TOO LATE
Drought during the winter sowing campaign and severe frosts in January and February hit winter grain yields in Ukraine, which fell to an average of 2.60 tonnes per hectare in 2012 from 3.06 tonnes per hectare last year.
Ukraine, targeting a 2012 grain crop of 45 million tonnes, has harvested its early grains, mostly wheat and barley.
Its wheat harvest fell to 16.3 million tonnes from 22.3 million tonnes in 2011, while the barley harvest fell to 7.2 million tonnes this year from 9.1 million tonnes.
Hot weather in July could also have damaged output of late grains, analysts said, with recent rainfall and a drop in temperature unlikely to improve crop conditions significantly.
"Following the extraordinarily hot and dry weather, the air temperature dropped by 7 to 10 degrees and rain fell everywhere," UkrAgroConsult consultancy said in a report.
It said most late crops in southern Ukraine were in poor condition, except those plantings under irrigation.
"In many areas, maize, soybean and sunflower crops are drought-stressed, have ripened prematurely and formed low yields. Part of them was even lost," the consultancy said.
Weather forecasters say hot weather is likely to return to most Ukrainian regions in the next few days, with temperatures reaching 30-32 degrees Celsius in eastern and southern regions.
Ukraine cut its maize output forecast to 20 million tonnes from an earlier 25 million tonnes due to drought. Last year, the country's maize harvest was 22.7 million tonnes.
Forecasters expect rain in Astana and the grain belt north of Kazakhstan's capital in the next few days. The Agriculture Ministry forecasts a 2012 grain crop of 13 million tonnes, less than half of last year's post-Soviet record 27 million tonnes.
The ministry said that Kazakhstan had harvested grain from 4.29 million hectares, or nearly 28 percent of the sown area, as of Aug. 22. The country had threshed 3.1 million tonnes, with yields so far averaging only 0.73 tonnes per hectare.
Despite the lower crop, Kazakhstan expects carryover stocks from last year's record crop to permit exports of between 10 million and 12 million tonnes in the current marketing year, only slightly below the 12.1 million tonnes shipped in 2011/12.
Both the European Union and United States adopted tighter restrictions on investments in Crimea this week, targeting individuals, Russian Black Sea oil and gas exploration and tourism.
Chinese Premier Li Keqiang said the offer included $1 billion for infrastructure, $490 million for poverty alleviation and $1.6 billion in special loans for China's production capacity export
Ukraine could default on its debt obligations if the situation does not change in the next few months, S&P said on Friday.
Damascus has relied on Tehran to fight its war with drop in oil price affects oil-producing Iran. Syrian traders say Damascus worried about future support
The ruble makes small gain Friday morning, but RTS index continues to contract
Norwegian energy company Statoil, which suspended 5 rigs in the last 2 months, granted $610 million for development of its gas fields
Putin earlier announced pipeline project via Bulgaria would be cancelled.
President Vladimir Putin said that Russia needed to take the opportunity to diversify its economy to protect it from external shocks.
Verdi said in a statement that workers at four of those centres had decided to continue their strike until Saturday and employees at the Graben warehouse would strike until Dec. 24.
Russia suffers as sanctions bite economy; will crisis make Ukraine conflict too costly?
EU to tighten sanctions on Crimea in time for leaders summit to send message to Russia
The Organization of the Petroleum Exporting Countries declined to cut production at a Nov. 27 meeting and, despite slumping prices, major Gulf OPEC members have since shown no sign of reversing course
Iran plans to export petrochemical products to Europe after one year of U.S.-led sanctions on its petchem market
Russia's central bank took drastic action to defend its rouble currency in a surprise midnight raising of interest rates by 650 basis points to 17 percent.
It argues that a major submarine ridge of the Arctic Ocean is an extension of its autonomous Greenland.
Russia is the second biggest exporter of illicit money, India is fourth, Brazil seventh and South Africa is 12th, according to the report.