Russian Wheat Crop Seen With Quality Issues After Rainy Harvest
19.11.2013 / Bloomberg

Russia’s wheat crop, rebounding from last year’s drought, has a higher-than-usual proportion of feed- quality grain because of rains during harvesting, according to billionaire Oleg Deripaska’s farming unit.

“Wheat quality is an issue this year,” Andrey Oleynik, managing director of agribusiness at Deripaska’s Basic Element holding company, said by e-mail today. “There is a lot of feed wheat, and a significant part of fourth-grade milling wheat crop has low protein content.”

Russia’s wheat crop will jump 37 percent to 51.5 million metric tons in 2013 as it rebounds from last year’s drought, the U.S. Department of Agriculture estimates. Rains across Russia hampered harvesting in August and September, with Moscow having its wettest September on record, according to the national weather center. Wheat is down 16 percent this year in Chicago. Some 47 percent of wheat harvested by the company’s farming unit, Kuban AgroHolding, is milling quality, and 53 percent is feed wheat, or grade 5 under Russian classification, according to Oleynik. Milling wheat accounted for 92 percent of the company’s crop last year, he said. Kuban farms 86,000 hectares (212,511 acres) in the southern Krasnodar region, according to its website.

There’s 15 percent to 20 percent less fourth-grade milling wheat, the main export variety, across Russia this year, he said. Still, Russia’s main markets such as Egypt aren’t very concerned about quality, according to Oleynik. “There are quite a few regions where wheat is sprouted or hardly qualifies as feed quality as it was harvested under the rains,” Oleynik said. “This is a problem in Mordovia, and central areas that usually harvest in August-September.

Undersized Grains

Another issue in some areas is undersized grains, according to Vladimir Petrichenko, director of Moscow-based consultancy OOO ProZerno. Russian farmers harvested 54 million tons of wheat, measured before drying and cleaning, as of Nov. 19, according to the Agriculture Ministry. The crop has higher moisture content than last year because of the rain, and net weight after drying will be about 7 percent less than the harvest, ProZerno estimates. That suggests a crop of 50.2 million tons, Bloomberg calculations show. Kuban harvested 173,100 tons of wheat this year, a 59 percent increase from 2012, Oleynik said. The corn crop jumped 37 percent and the barley crop was similar to last year’s, he said.