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. Last Updated: 07/27/2016

Grain Exports to Plunge Due to Weather

Russian grain exports are set to plunge this year because of a lower harvest due to drought in the country's south and heavy rainfall in Siberia, Agriculture Minister Alexei Gordeyev said Wednesday.

The country will export between 7 million tons and 8 million tons of grain in the agricultural year beginning July 1, compared with the more than 12 million it shipped last year, Gordeyev said at a news conference.

Russia is among the top five grain exporters in the world. Analysts said the drop in exports should not have far-reaching consequences for the industry, however.

"We have the first data on the drought in the Stavropol krai, and Siberia confirms rainfall during the harvest, and that could lead to the loss of grain," Gordeyev said. The Stavropol krai is one of the leading growing areas.

Russia had a bumper harvest of 78 million tons of grain last year, as the agricultural sector continues to revive after a severe slump in the 1990s.

Despite the lower harvest forecast of 70 million tons for this year, from an earlier 73 million tons, Gordeyev said the speed at which the fields were being harvested was improving due to "a higher level of technology and better organization."

Dmitry Rylko, general director of the Institute of Agricultural Market Studies, said the lower harvest forecast was not surprising given significant winterkill losses. "But there won't be any catastrophic consequences," he said.

Separately, Gordeyev said if sugar prices remained high for the next three to five years, Russia might reduce import tariffs as the domestic sugar industry would be able to revitalize in that time.