The Institute for Agricultural Market Studies cut its
forecast for Russia's grains crop this year in one of the first signs of damage
from hot and dry weather, and warned over a slump in Ukraine fertilizer imports
The institute, also called Ikar, which last week raised its
forecast for Russia's grains harvest by 1m tonnes to 96m tonnes, on Tuesday cut
its estimate back to 93.5m tonnes.
This forecast was "not as excellent as we expected even two
weeks, even one week ago", Mr Rylko said, estimating wheat production at
52m-53m tonnes, down from a forecast of 54.5m tonnes last week.
The retreat reflected the impact of an incidence of the hot
and dry Sukhovey winds which have a history of hitting Russian crop production,
and causing early summer spikes in world prices, notably in two years ago.
Indeed, wheat markets worldwide have been closely monitoring
signs of crop damage from the dry weather, which has affected in the main the
Volga Valley region, and parts of North Caucasus.
'Rains on their way'
However, Mr Rylko downplayed the prospect of heavy losses in
the offing, saying that weather forecasts showed that "about half of the area
of concern will receive pretty precipitation today", with further moisture
This may "already fix damage" in crops, he said, flagging in
particular spring barley as a potential for yield recovery prospects.
Even at 93.5m tonnes, the output forecast was "not bad".
In the key South export region, Ikar forecast a wheat harvest
of 21.2m tonnes, down more than 10% year on year, but still enough to support shipments
of 15.0m tonnes, some 84% of total Russian volumes expected in 2014-15.
Within the South, Krasnodar will see a record crop of 7.13m
tonnes, but crops in Stavropol, at 6.68m tonnes, and Rostov looked like falling
a little below earlier expectations.
By contrast, Ukraine growers had enjoyed benign weather, in
terms of a mild winter which had prompted "record low" levels of winterkill, "of
2.5%, maximum 3%", Mr Rylko told the International Grains Council conference in
However, they faced the setback of the political and economic
crisis evident in a slump in fertilizer use - with imports tumbling by one-third.
This decline had not been so evident in the agrichemicals
market, nor in seed, with farmers planting "almost as much area with corn" as
The particular downturn in fertilizer use was because in
that industry merchants "always ask for money up front.
"There was no money" available, meaning a drop in purchases
"We will see at the end of the summer how this effects
quality and quantity" of the harvest, Mr Rylko said.
'Crazy for protein'
The comments came in a talk in which he underlined the Black
Sea's growing status as a grains exporter, no longer just of lower quality
wheat, but corn and high protein wheat too.
"Every year we supply more and more protein [wheat] to the world
market," reflecting importers' requirements, and changes in Russia's weather
and improved agricultural practices.
Buyers from Turkey, long a major Russian wheat export market,
"are crazy for protein".
But new markets were also opening up, thanks in part to the
entry of new merchants into Russia.
Olam International, for instance, which has milling assets
in Nigeria, had been behind the shipment to the African country of 350,000
tonnes of Russian wheat, with protein up to 14.5%.