Rising fertilizer sales add to hopes for Russia's 2017 grains harvest

03.02.2017
Russia, fresh from a record grains harvest last year, is poised for a "good" crop of winter cereals in 2017 too, US officials said, flagging growing fertilizer use, besides a rise in plantings.
 
Russian farmers had - in sowing winter grains across an officially estimated 17.4m hectares for the 2017 harvest - beaten both the government target and year-ago area of 16.3m hectares, the US Department of Agriculture's Moscow bureau said.
 
The increase in area was down in part to "favourable weather and sowing conditions" during the planting window, the bureau said in a report.
 
However, it highlighted too "strong [domestic] grain prices" which had "supported grain producers' incomes".
 
"According to industry analysts, higher prices for grain, oilseeds and other crops in 2015-16 and summer 2016, and relatively good returns, allowed farmers to adequately finance winter crop sowing," the briefing said.
 
Furthermore, the Russian government had been more generous with loans, which for operations stretching back to last year's spring sowings had "reached 330.2bn roubles – a jump of 32% year on year.
 
Fertilizer sales rise
 
Some of the cash had been used to finance increased purchases of crop inputs, a factor which has only supported ideas of a decent harvest this year.
 
Fertilizer purchases last year rose by 11.1% to 2.78m tonnes, according to farm ministry data, growth encouraged also by weaker prices of nitrogen and phosphate nutrients, although potash costs had shown a small increase.
 
Given that the "2016 mineral fertilizer 'need' for seasonal field works is approximately 2.6m tonnes" according to provincial authorities, purchases at this level had allowed some stockpiling of fertilizers, with inventories pegged at some 3m tonnes, a rise of 333,000 tonnes year on year.
 
On Wednesday, PhosAGro, the Russian-based phosphates and nitrogen group, reported what it termed an "impressive" rise of 30% to nearly 2.1m tonnes in domestic fertilizer sales in 2016.
 
"The Russian market remained one of the fastest-growing globally last year... driven by strong development of the domestic agriculture industry," PhosAgro chief executive Andrey Guryev said.
 
'Good winter grain crop likely'
 
The bureau added that, with crop condition reports encouraging too, the Russia's winter grains crop – which is responsible for most of the domestic harvest – appeared well placed.
 
"Although it is too early to do any forecasts, the increased winter crop area, better-than-last-year inputs in winter sowing, and better winter crop conditions at the end of fall 2016, indicate that a good winter grain crop is likely in 2017."
 
The comments tally with indications from some other commentators of upbeat signs so far for Russia's 2017 harvest prospects.
 
Ikar on Tuesday pegged total grains output this year at 112m-114m tonnes, a harvest which would rank second only to last year's 119m-tonne result.
 
Of this total, wheat will account for 67m tonnes, down from 73m tonnes last year, Ikar said.
 
 

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