FAO/GIEWS - Foodcrops & Shortages 06/99 - RUSSIAN FEDERATION (25 June)
Current indications point to a recovery in cereal production this year compared to last year (estimated at about 55 million tonnes by FAO). Output, however, could remain somewhat below average. Favoured by an early spring and despite economic problems, spring grain planting is nearing completion and indications are that the target of 38 million hectares will be met if not surpassed. Farmers are expected to maximize the area sown to grains as prices are high and grain provides an inflation-proof means of payment. Good precipitation this winter in most areas recharged soil moisture reserves but late frosts in May and high temperatures in June caused some damage. However, even if normal weather prevails until the harvest in September/ October, inflation and the chronic shortage of inputs are expected to keep yields below average. The bulk of inputs will have to be procured by barter, but resources from last year's poor harvest are limited. Fuel prices have risen sharply, adding to farmers' difficulties.
The outlook for winter grains remains favourable. The area sown fell by 4 percent and of the 13 million hectares sown, crops on 1.9 million hectares were affected by winterkill (1998 1.1 million hectares). Growing conditions have been mostly satisfactory except in parts of the North Caucasus (Stavropol and Rostov) and overall winter crops are in a better condition than last year. Provided weather remains favourable, average yields could be higher than last year and winter grain output could increase by some 10 percent to about 21 million tonnes including 15 million tonnes of wheat compared to 14 million in 1998. FAO tentatively forecasts 1999 grain production at 65 million tonnes, including some 33 million tonnes of wheat (1998:30 tonnes) and 30 million tonnes of coarse grains (1998: 22.6 tonnes).
Despite last year's poor harvest and reduced imports, the overall food supply situation is not critical but stocks are being drawn down sharply and the price of wheat, in nominal terms, has doubled to around US$95-100 per tonne. The shortage and high price of feedgrains has adversely affected livestock production and output, even of poultry - a sector which was showing signs of recovery until this year - is forecast to decline. However, demand for livestock products has also fallen because of the loss of purchasing power in the population. In the coming months, the scarcity of stock feed is likely to ease with the growth of natural pasture. Current indications are that in-country stocks are sufficient to meet food demand until the end of the current marketing year. About half of food aid pledged in 1998/99 (3.8 million tonnes of grain as well as meat, dairy and soybean products) is now expected to arrive between July and September 1999. These deliveries will help to ease the tight supply situation until the completion of the harvest and contain prices. However, the outlook is for the grain supplies to also remain tight in 1999/2000.
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