Russian Grain Union expects 89-92 mln tonnes of grain to be harvested in 2011.

25/7 Tass 133

MOSCOW, July 25 (Itar-Tass) —— The Russian Grain Union expects 89-92 million tonnes of grain to be harvested ion the country this year.

“The situation has been quite favourable so far,” Russian Grain Union Vice-President Alexander Korbut said on Monday, July 25.

Wheat crop alone reach about 58 million tonnes.

Earlier, First Vice Prime Minister Viktor Zubkov quoted experts as projecting a crop of 90 million tonnes in 2011, including 17 million for barley (6.5 million tonnes last year), and 850,000 tonnes for buckwheat (330,000 in 2010).

Agriculture Minister Yelena Skrynnik confirmed that Russia expects to harvest more buckwheat this year and there are no reasons for its price to grow.

“There was a speculative outburst last year. If it continues, the Federal Antimonopoly Service must interfere. This is its duty,” Skrynnik told Itar-Tass on Monday, July 25, after a meeting on the situation on the grain market, which was chaired by President Dmitry Medvedev.

“[Buckwheat] production volumes are sufficient to meet all needs,” she added.

Zubkov said 850,000 tonnes of buckwheat would be harvested this year. “In 2010, we had 350,000 tonnes and prices were hyped up to over 100 roubles per kilogram,” he said.

Korbut also expects grain prices to fall on the world markets.

“Even with stable prices for Russian grain, purchasing prices will most likely decrease,” he said.

He believes that “this is a very serious challenge for the government and the grain business in general”.

Korbut warned against allowing grain prices to fall below 5,000 roubles per tonne.

Zubkov said, however, that the Russian government expects the grain price of 5,200-5,600 roubles per tonne to stay on in July-September 2011.

“There is no need for customs and tariff regulation, as the president has said,” he said.

Zubkov stressed that the current domestic price is “still acceptable at around 5,200-5,600”.

“Of course, grain producers would like it to be over 6,000 [roubles per tonne] a more. But those who consume grain – mills, combined fodder plants – find this price most comfortable. So we should try to keep these prices for July, August and September,” he said.

Korbut admitted that Russian grain prices are slightly lower than the average world grain price due to the grain export ban that was imposed in Russia last August and was lifted from July 1, 2011.

In his opinion, it will take some time for prices to equalise. “Two years for sure,” he added.

Skrynnik believes that Russia will be able to regain its export positions on international markets this year.

This year’s yield is 3,500-3,600 kilograms per hectare. In 2009, which was considered a good year, it was 3,100 kilograms per hectare, she said.

“So, our crop expectations appear to be quite good, and there are two figures we are discussing: 85 million and 90 million tones,” the minister said.

Medvedev also believes that Russia would be able to boost its grain export potential this year.

“About 20 million tonnes of grain had been harvested by the middle of July, and the weather is quite favourable,” the president said.

“If you keep this pace, we will get the expected 90 million tonnes and even slightly more,” he added.

“We will not only meet our own grain needs this year, but we can also return to the question of boosting Russia’s export potential,” the president said.

The government lifted the ban on the export of grain from July 1. The ban was imposed last August because of a sever drought in several grain-producing regions. In 2010, the grain gravest was down by 37 percent from the previous year to 60.9 million tonnes.

Zubkov agreed that Russia can export 2 million tonnes of grain in 2011.

As of July 1, Russia was exporting grain to 27 countries, including Turkey, Egypt and Africa.

“Today we are exporting to 33 countries: European countries have been added up – Italy, Spain, the Netherlands, all of the Transcaucasian republics, including Georgia and Armenia,” Zubkov said.

He said there are requests from other countries for 7 million tonnes of grain.

Zubkov recalled that by imposing a ban on the export of grain Russia never stopped the export of flour. “About 600,000 tonnes of flour were exported,” he said.

Flour is a product with a 25-30 percent added value, and producers have already felt the benefits of its export.

“We should think about how to stimulate those who export flour in order to increase it,” Zubkov said.

“The situation is favourable for export,” he added.

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