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. Last Updated: 07/27/2016

Europe Bracing for Russian Grain Flood

The country is set to flood Western Europe and beyond with millions of tons of grain after a dire 2003 season, but fellow Black Sea producer Ukraine will probably fall short of targets.

Analysts said Russia, the major grain grower in the former Soviet Union, could send abroad between 8 million tons and 10 million tons of grain this year, above official forecasts of 5 million tons from a crop of 73 million to 76 million.

But Ukraine, which deluged the European Union with feed grain in 2002/03, could export several million tons less than the official forecast of 9 million tons.

Both states roared back onto the international grains stage this season, following a poor harvest last season.

They are likely to be fierce competitors for business, while top-quality producer Kazakhstan should be above the fray, supplying traditional customers Russia and Iran.

"We believe [Russia's] harvest to be around 77 million tons, and we will be able to export 8 million tons," said Igor Pavensky, an analyst with the Institute for the Agricultural Market studies.

He said the bulk of the exports would be made up of milling grade wheat with a protein content close to 13 percent, as well as 1.5 million tons of feed wheat and around 4 million tons of feed barley.

"Our export potential is between 6 million and 8 million tons," said Vladimir Petrichenko, an analyst with WJ InterAgro trading company.

"But actual exports may amount to 4 million to 5 million tons of milling and feed wheat and up to 1 million to 1.5 million tons of feed barley."

Petrichenko said he expected domestic grain consumption to rise to 70 million to 71 million tons in 2004/2005 from 66 million to 68 million in the previous season, boosted by cheaper feed grain compared with last year. That should stimulate animal breeding.

Some traders put their targets even higher.

"We may export up to 10 million tons," said Kirill Podolsky, director of Yugtranzitservis trading company. "Output may be 80 million tons, as the main producing regions in the south have increased production substantially.

But for Ukraine, which plans to harvest at least 35 million tons of grain in 2004 compared with 20.2 million in 2003, the outlook is weaker.

Analysts said they forecast exports at about 7 million tons, including about 2.6 million tons of mostly feed wheat, 2.8 million of barley and 1.1 million tons of maize. That would be lower than official hopes for 9 million tons, including 4.5 million of wheat.

Earlier this week, the government said Ukraine exported about 700,000 tons of barley and 142,000 tons of wheat in the first two months of the 2004/05 season while it sold abroad over 1 million tons of wheat and 460,000 tons of barley in the same period in 2002/03.

Analysts said that neither Russia nor Ukraine faced competition from the other large producer in the former Soviet Union -- Kazakhstan.

Kazakhstan, which should export mainly high quality milling wheat, expects to produce 12.1 million tons of grain this year and to export 5 million tons, mainly wheat.