Prospects look poor for a revival in Russia's domestic grain prices, which are being hurt by factors from large stocks and poor export infrastructure to brewery scrimping on malt, Black Earth Farming has said.

Sunflowers were one of the few crops "to exhibit food profitability" in Russia, the farm operator said, highlighting a halving in prices of malting barley.

"[The grain] has been struck a significant blow by lower demand for beer, coupled with Russian beer producers lowering the malting content to economise," Black Earth said.

And with this year's production forecast at about 100m tonnes, beating official forecasts, ending stocks for 2009 are "expected to be even higher than a year ago".

"Ergo, there is no respite for downward pressure on grain prices in Russia," the Stockholm-listed company said.

Russian feed wheat is, at 2,875 roubles a tonne, is down two-thirds from an April 2008 high, if 20% higher over the last two months, data from Mowscow-based analysis group Sovecon shows.

'Problems with rail capacity'

While forecasting that Russian wheat prices could "go very low", undermined also by static domestic demand, options for avoiding sales faced limitations on the alternatives – storing, or selling abroad.

Last year's grain purchases through state intervention had take up significant silo capacity, besides landing the government with unforeseen storage costs.

And sales abroad faced a "still-limiting factor in the country's export infrastructure", Black Earth said, pegging Russia's export limit at 18m tonnes.

While estimates differ over Russia's grain export capacity, which is centred on its deep water ports of Novorossiysk and Tuapse, Black Earth's warning of a squeeze tallies with comments from other observers.

The European Bank for Reconstruction and Development said in June that Russia's infrastructure was "not fully prepared" while UK cereals marketing body HGCA notes Russia's "problems with rail capacity and port terminal storage".

Black Earth's comments came as it unveiled widening losses for the first nine months of the year, thanks to lower crop prices and a shortfall in production.