Grain and Pulse Forecasts for Russia and Ukraine
Crop yields remain strong in Russia and Ukraine for 2015. A slight decrease on 2014 is offset by a general trend towards growth, as seen over the last five years.
Official data states that the area currently used for grains and pulses is 46 million hectares: more than 16m in winter, and about 30m in spring. As usual most attention is paid to winter crop results.
Taking into account the weather conditions during the autumn 2014 sowing campaign and in December, winter crop losses in the current season are expected to reach 8-9%. Most of the agricultural producers will keep the areas planted with grain in the current year at the previous year’s level, including spring wheat planted areas, because of the need to replant areas where winter crops have been lost.
Based on 43m ha with an average yield of 22.1 c/ha, the first forecast of grain crop volume for 2015 is 95-97 million MT (a 10% reduction on 2014 but still more than average production levels in the last five years). The latest official forecast is 100m MT. Wheat production is expected to reach 54-55m MT, barley 17m MT and corn for grain 11m MT. These figures reflect reduced yield levels. In addition, recent devaluation of the rouble has caused grain cultivation costs to increase significantly as prices rise for input materials and technical resources. The above figures will be updated in mid-June when we will see exact yields and crop conditions in different regions.
Achievement of this forecast depends very much as usual on pre-harvest weather conditions.
During the first half of May (2015), in the European regions of Russia, the agro-meteorological conditions were mostly satisfactory for planting. Since then, the weather in most Russian territory has been rainy with temperatures below average level, however, in general weather conditions are favorable for crop vegetation.
Domestic grain consumption in the current season is 69-70m MT. Bearing in mind carry over stocks (including state intervention fund), potential grain exports for Russia in the coming season are predicted to be 26-27m MT, including wheat – 19-20m MT, corn – about 3m MT, and barley – about 3.1-3.2m MT. However, it is difficult to predict and the final figures will depend on the application of Russia’s new export tariff mechanism.
According to official data, Ukraine planted 14.8m ha of grains and pulses for harvest in 2015, comparable to the previous year (a 10% increase in wheat planting and a decrease in barley and corn). 2015’s yield forecast is lower than 2014. The estimated average yield of wheat is 3.6 MT/ha against 4.4 MT/ha in 2014. The underlying causes of this decrease are the same as in Russia – significant increases in grain production costs due to devaluation of the Hrivna, rising prices for imported materials and input resources, and the increasing cost of various supplementary services.
Taking into account the expected decrease of yield, the first estimate of cereal production is 53-54m MT. Negative weather conditions and a decline in fertilizer application has affected the previously announced figure. According to the USDA’s latest report, Ukraine’s 2015 grain production forecast totals 55.3m MT. The wheat harvest will total 22m MT, and feed grains 33.3m MT, including 26m MT of corn.
Domestic grain consumption in the current season is 30m MT.
Similarities between weather and climactic conditions in Russia and Ukraine mean they will both be subject to the same influences on harvest results and export potential. Difficult economic trading conditions, in both regions, may also have an impact.
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