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. Last Updated: 07/27/2016

Drought, Cold Snap Threaten Already Low Harvest Forecast

A combination of cold spring weather and drought in the country's main southern grain-producing regions could threaten an already low harvest forecast, Agriculture Minister Alexei Gordeyev told reporters Wednesday.

The Agriculture Ministry is sticking to its previously announced grain forecast of 70 million metric tons for 2003, a fall of 24 percent on last year's record 86.6 million tons -- and a deficit on expected consumption of 4.5 million tons.

"The weather has been unusually cold in most of Russia's regions and the grain harvest will be delayed by 10 to 12 days this year," he said.

"Such a delay will complicate the harvest due to the onset of fall," he added.

Gordeyev said the Krasnodar, Stavropol and Rostov regions had suffered from drought over the past two months.

The minister said that while he was sticking to his original forecast, he would present "a revised figure, taking into account the situation in all the regions," by the end of July.

"We can already say for sure that this year we will not have the volumes we had last year," Gordeyev said.

Gordeyev announced that the government would soon provide extra funds to keep harvest losses to a minimum.

A presidential decree would provide 1.5 billion rubles ($49 million) from the federal budget to finance harvesting, he said.

The ministry's downbeat forecast was reinforced by Dmitry Rylko, the general director of the Institute for Agricultural Market Studies.

"The situation in southern Russia is very difficult," he said. "Recent rains won't help the situation, as they are too late."

He said his institute's forecast for this year's harvest was between 66 and 72 million tons.

Rylko agreed that consumption was likely to exceed production, leading to higher prices over the second half of the year -- and reduced exports.

"It would be reasonable for the government to store more grain in the federal grain reserve now -- to cool down the situation in the second half of the year," he said.

Earlier this week Igor Rudenia, a senior official at the Agriculture Ministry, said the government was considering whether to rule out government purchases of grain from its intervention fund for the rest of the year, Itar-Tass reported.

Gordeyev said the government had no plans to sell its 1.8 million tons of grain reserves, even though this would defray storage costs.

"This is the optimal reserve the government needs," Gordeyev said. "Today the situation does not show that we should put this grain on the market."