Russia lifts grain export hopes for 2014-15

Russia is set for bumper grains exports next season, agriculture minister Nikolai Fyodorov said, following up last week's upgrade to the harvest estimate, as US officials turned a little more optimistic on the country's output prospects too.

Mr Fyodorov lifted by 3m tonnes to 25m tonnes the farm ministry forecast for Russian grain exports in 2014-15, which starts in July.

That would leave volumes, most of which comprise wheat, only marginally behind shipments for this season, which the US Department of Agriculture expects at 25.1m tonnes and analysis group SovEcon forecasts at 25.6m tonnes.

Indeed, they would be historically strong, and well above the 16.3m tonnes achieved in 2012-13.

Wheat forecast

The country's robust export hopes are in part down the weakening of the rouble, which has improved the competiveness on global markets of Russian supplies already renowned for being typically amongst the cheapest on the market.

However, they also reflect improved harvest hopes, with Mr Fyodorov last week raising to 100m tonnes the ministry estimate for the Russian grains harvest this year.

That will includes some 53m-55m tonnes of wheat, he said on Wednesday, up from the 52.1m tonnes harvested last year.

Harvest upgrade

The official grain harvest forecast is broadly viewed as optimistic, with some private estimates below 90m tonnes.

However, the USDA bureau in Moscow overnight lifted their own estimate for Russia's grains harvest by 1.0m tonnes to 92m tonnes, putting it in line with the 92.3m tonnes achieved last year.

Although poor autumn conditions had held back sowings of winter grains, what had been seeded was in generally "good" condition, while growers had been able to make up for lost area through higher spring plantings.

The farm ministry has estimated corn sowings at 2.58m hectares, up 5.3% year on year, and up 50% on 2011 area, echoing a move to the grain already seen in neighbouring Ukraine, and helped by seed technology.

Lending worries

The USDA bureau pegged dry weather and farmers' "limited financial resources" as the two main threats to the Russian grains harvest, noting that the "overall financing of spring field works is lagging behind the farmers' needs and last year's level".

As of mid-May, farmers had been able to borrow "only" 75bn roubles ($2bn) for spring sowings and fieldwork, down 11% year on year.

"The banks are worried by farmers' high indebtedness and the growth of delinquent loans," the bureau said.

"As a result, the banks increased interest rates, tighten requirements for collateral, and extended the time for consideration of applications.

"Many farmers do not have liquid collateral and cannot obtain loans secured by future harvests."

Russia upgrades grain hopes, despite dryness fears
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