Russia’s grain fields are in 'bad shape' after receiving little rain this autumn, adding to concerns the harvest will fall short of the country’s needs.
If the weather doesn’t improve, the harvest may decline to 85 million metric tons, a three-year low, according to Pyotr Chekmaryov, director of the Agriculture Ministry’s plant department.
Russia wants to collect 100 million tons in the harvest that starts July 1 given the “complicated geopolitical conditions,” Agriculture Minister Nikolai Fedorov said on Wednesday.
“There are big problems that require our attention,” Chekmaryov said at a conference in Moscow. “It’s winter crops. They are our serious pain.”
Russian policy makers are concerned about the progress of the grain crop as shoppers deal with food prices that soared 21 percent last month, the most since 2008. The nation’s economy is on the verge of recession after a plunge in oil prices and international sanctions over the conflict in Ukraine.
Russia banned wheat exports for 10 months starting in 2010 after drought and wildfires slashed the harvest, helping push prices in Chicago to the highest in more than two years. Speculation restrictions would return in 2012 spurred another rally, with wheat trading as high as $9.4725 a bushel, about 80 percent above the current level.
Regulators have sought to lower food costs with a tax on wheat exports that started this month. Dry weather left wheat vulnerable to damage this winter and higher interest rates make it harder for farmers to expand production.
Bloomberg News, edited by ESM
