Russia on Thursday admitted that a poor harvest will force the world’s third-largest wheat exporter to “considerably” cut its foreign deliveries despite worrying spikes in global food prices.
But Agriculture Minister Nikolai Fyodorov stressed that he firmly opposed a grain export ban like the one imposed two years ago and insisted that some shipments to key clients such as Egypt would still be made.
“Unfortunately, our forecasts are changing literally by the day,” Fyodorov told the state’s Vesti 24 news channel.
“At the moment, the trend is not very good,” he added.
“Obviously, our exports and other things like reserves will be slightly lower — considerably lower.”
Fyodorov said Russia went into the year expecting to match the 2011 output level of 94 million tonnes of grain. An early winter frost quickly put that target out of reach, with drought now taking its toll.
The latest cut in forecast brought the annual output level down close to 75 million tonnes — just five million tonnes higher that the annual domestic consumption mark and one making any exports extremely risky.
“We started the year expecting — hoping for — last year’s level,” said the minister.
“Until a few days ago, we were forecasting 75-80 million tonnes. But today, we should probably stop talking about 80 million tonnes. We should be talking more about a figure closer to 75 million tonnes,” Fyodorov said.
He called ongoing drought conditions in Russia’s southern farming region “abnormal” and tried to calm consumers by noting that two special state reserves held some 23 million tonnes of grain for emergency situations.
“This figure does not scare us at all,” he said of the 75 million tonne forecast.
“In the drought-hit, dangerous and difficult year of 2010, our volume was 60 million tonnes.”
Russia that year temporarily halted all grain exports in a move experts said contributed to the social unrest in the Middle East and northern Africa that eventually developed into the Arab Spring revolts.
But the latest drought conditions are also putting a strain on the Russian economy and leading to price rises that could worry Putin in a year of the largest political protests on the streets of Moscow since Soviet times. Putin had strongly backed the 2010 grain export ban as prime minister but has not mentioned the idea since returning to a third presidential term in May.
Russia’s farmers have also complained that turmoil on European markets was making it difficult to access loans necessary for making long-term investments needed to upgrade to more modern and efficient production methods.
The country’s output still recovered quickly from the heavy drought year of 2010 and brought it farmers back out onto the global markets en force. The US Department of Agriculture has put Russia’s wheat exports for the 2011-2012 season at about 21 million tonnes. It predicts that figure to fall to 11 million tonnes in this harvest year.
Fyodorov for his part said Russian consumers had little to worry about because the country was certain to remain self-sufficient this year. “The nation and our people are protected 100 percent,” the minister told state television.