Russia cuts grain forecast, says trend unfavourable

PUBLISHED : Thursday, 23 August, 2012, 4:10pm
UPDATED : Thursday, 23 August, 2012, 4:15pm

Russia’s Agriculture Ministry cut its 2012 grain crop forecast to 75 million tonnes from 75-80 million tonnes, minister Nikolai Fyodorov said on Thursday.

“The forecasts change almost every day. At the moment the trend is not very favourable. Clearly it will not be 80 million tonnes, it is more likely 75 million,” Fyodorov said in an interview with state Rossiya 24 channel.

In July, one of Fyodorov’s deputies said the harvest outlook could ultimately fall to 70-75 million tonnes, setting off a wave of speculation that Russia, which consumes about 70 million tonnes of grain each year, could ban exports as it did in 2010 in response to a drought.

Fyodorov ruled out a ban on grain exports last week. Fears of a ban have helped drive global prices higher following drought in U.S. and Black Sea grain belts.

He reiterated that position on Thursday.

“We are categorically against any measures which would destroy the market,” Fyodorov said. “We need to make very cautious moves.”

Several analysts have downgraded their forecasts in recent days. The SovEcon consultancy now expects the grain crop in a range of 71-72.5 million tonnes - among the lowest forecasts.