Black Sea drought could threaten crops into 2011

Friday 1431/9/3 - 2010/08/13
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MOSCOW/KIEV, 03 Ramadan 1431 H/August 13, 2010, SPA -- A fresh warning that up to a third of Russia's next winter wheat crop might lie fallow until the spring renewed fears that the Black Sea's drought could eat into next year's harvest as well as cut wheat supplies this year.
The outlook for crop problems into 2011 is tempered by ample stockpiles after record world wheat production in both 2008 and 2009, according to Reuters.
U.S. wheat futures retreated for the fourth time in six sessions, ending the week down 3 percent after nearly doubling since late June.
Russian First Deputy Prime Minister Viktor Zubkov said the sowing area for winter grains for the 2011 crop may fall by one third to 12 million hectares, citing an Agriculture Ministry forecast.
"Therefore, 6 million hectares will have to be sown with spring grains," Zubkov told reporters after a governmental commission meeting on the drought.
Zubkov also said a ban that is about to halt Russia's grain exports and is designed to restrain domestic food prices amid its worst drought in more than a century will not be lifted earlier than its Dec. 31 expiry.
That contrasted sharply with comments from Russian President Dmitry Medvedev who said on Thursday the ban could be lifted before its planned Dec. 31 expiry, depending on the harvest. Prime Minister Vladimir Putin has said it could last into 2011.
Other exporters such as the United States and Europe should be able to easily fill any trade gap left by grain export bans in the Black Sea region, traders said.
Putin quizzed the head of the anti-monopoly watchdog, Igor Artemyev, on whether the ban was already restraining food price inflation.
"Hang on ... I would like to get it right for myself. So you think that there was still a certain rise (in prices) and you are not seeing any fall?" Putin asked in a meeting.
"We do not see it yet. The export ban announcement of course should have had a positive impact on price stabilisation inside Russia, we are expecting it as an economic trend but do not see it yet," Artemyev said in a transcript posted on a government Website.
UKRAINE LOSES GROUND TOO
The sowing of winter wheat traditionally starts in August. The winter crop accounts for 90 percent of Ukraine's total wheat harvest, and in Russia winter grains account roughly for 40 percent of the grain total.
Ukraine is poised to decide next week on proposals to impose a limit on its exports.
The country harvested 28.5 million tonnes of grain as of Aug. 13, 20 percent less than at the same date a year ago, a local news agency said.
Ukraine's weather forecasters said there was no reason to start winter sowing until the end of August because the upper level of the soil had no moisture.
"The situation with winter sowing will not be favourable by the end of August," Anatoly Prokopenko, deputy director of the Ukrainian Hydrometcentre government weather forecasting service, told Reuters.
"Ukrainian southern and eastern regions will stay without rains, while insignificant rains could fall on other parts of the country," he said.
Elsewhere, Hungary's almost completed wheat crop came in at 3.72 million tonnes by Aug. 11, down 16 percent from last year and a fifth below the five-year average, the agriculture ministry said.
Hungary's crop has also been hit by adverse weather, including floods earlier this year. The reduced crop also reflects decisions by farmers to plant less wheat for this harvest than previously.

--SPA
23:31 LOCAL TIME 20:31 GMT