5 february 2013

On February 5, Prime Minister Dmitry Medvedev will chair a meeting on the state of the grain market and preparations for the spring sowing season

Participants:

Participants in the meeting will discuss the state of the grain market and winter crops, the planned sowing area under spring crops in 2013, as well as the provision of equipment, technology and funding for the spring sowing season.

This will be a teleconference involving regional leaders. Direct video linkups with the Altai Territory, the Belgorod, Orenburg, Saratov and Tambov Regions are scheduled.

Gross grain harvests totaled 70.7 million tonnes during the current agricultural year, or 25% less than the previous agricultural year when 94.2 million tonnes of grain were harvested. This crop yield decline was caused by drought.

Surplus grain inventory totals 19.4 million tonnes. Moreover, Russia is to import 1.2 million tonnes of grain. Consequently, overall grain reserves will reach 91.3 million tonnes. This will make it possible to meet domestic market demand (68.8 million tonnes).

In an effort to stabilise the grain market and to expand grain supply, trading sessions have been conducted at seven regional subsidiaries of the National Grain Exchange in Moscow, Yekaterinburg, Novosibirsk, Samara, Nizhny Novgorod, Rostov-on-Don and St. Petersburg since October 23, 2012. These trading sessions are part of state commodity interventions.

Commodity interventions made it possible to slow price increases on the domestic Russian market. These prices are now growing by 1%-1.5% weekly.

The Federal Customs Service estimates that 13,480,000 tonnes of grain were exported in the 2012/2013 agricultural year (as of January 30, 2013), including 403,000 tonnes, which were exported on January 1-30, 2013. Russia exported less grain than the previous year when 19,382,000 tonnes of grain were exported during the same period.

Grain imports totaled 486,000 tonnes in July-December 2012, including 202,000 tonnes of wheat and 138,000 tonnes of barley. This is an increase over the previous year (324,000 tonnes). Russia received 99.9% of the above 202,000-tonne grain shipment from Kazakhstan.

Grain shipments, expected to reach 700,000-1,000,000 tonnes during the next six months of the current season, will primarily come from Kazakhstan.

Updated statistics submitted by regional agricultural management agencies estimate the nationwide area under winter grain crops to be 15.8 million hectares. The 2011 area was 16.3 million hectares. This reduction can be explained by unfavourable weather conditions during the winter-crop sowing season.

In 2013, the total area under spring crops for all categories of Russian farms is to reach 51 million hectares, or 5% more than in 2012 (50.7 million hectares), including 30.2 million hectares under spring grain and leguminous crops. The latter account for 97.9% of 2012 volumes (30.9 million hectares).

This year, agricultural producers are to focus on spring fodder crops, whose area is to expand by 990,000 hectares. The total area is to reach 6,571,300 hectares.

Officials at the Ministry of Agriculture say 2.09 million tonnes of diesel fuel and 405,000 tonnes of petrol will be required for the spring sowing season. Considering predicted February-June 2013 prices, total expenditures for the purchase of petroleum, oil and lubricants will reach 87.9 billion roubles.

As of February 1, 2013, agricultural producers purchased 234,500 tonnes of mineral fertilisers. Accumulated mineral-fertiliser inventories, including surplus 2012 fertiliser reserves, total 404,700 tonnes or 33,900 tonnes more than in 2012.

The equipment needed for regional spring sowing projects either meets 2012 levels or exceeds them.

As of February 1, 2013, demand for grain and leguminous seeds was about six million tonnes. In all, 5.8 million tonnes, or 96.1% of the required amount, are currently available. The same amount of seeds was available on February1, 2012.