Fertilizer Markets and Finance

The world wheat harvest is to fall by 17m tonnes, led by a slump in Ukraine’s production to an eight-year low, and with Europe’s crop – the world’s biggest – pegged at its weakest in four years.

Global wheat production in 2012-13 will drop to 677.6m tonnes, the US Department of Agriculture said in a much-anticipated report giving initial estimates for crop supply and demand for the season.

The most marked decline will be seen in Ukraine, which will reap 13.0m tonnes of the grain, a 41% decline year on year, reflecting “severe fall drought” that hampered crop development and winter frosts which “further damaged the already-weakened plants” in southern and eastern areas.

A USDA crop tour had revealed that overall crop condition was “not good”.

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Disruption wreaked on Syrian agriculture by poor weather and civil unrest have left the country facing a 1m-tonne rise in cereal imports for 2011-12, besides provoking worries over the next harvest too.

Syria’s grain imports, mainly of barley, corn and wheat, may top 4.0m tonnes this season, a rise of nearly 30%, following “low production” in 2011, the United Nations Food and Agriculture Organization said.

“Late and erratic rains led to poor crop establishment, especially in major rain-fed crop producing areas… in the north and north east,” the FAO said.

Output last year was further hurt by civil strife which “prevented farmers to access their farmland during the harvest”.

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Dry weather, blamed for ravaging Argentine corn, has increased pressure too on crops in South Africa and in Mexico, whose imports of the grain look set to set a record more convincingly than had been thought.

US Department of Agriculture foreign staff cut their estimate for the 2011-12 corn harvest in South Africa by more than 400,000 tonnes to 12.07m tonnes, citing “dry weather conditions that persisted during the planting season”, so delaying sowings.

For Mexico, the corn harvest estimate was cut to an 11-year low of 18.4m tonnes, 2m tonnes less than the USDA’s latest official forecast, which will be upgraded next week in the latest Wasde report on world crop supply and demand.

Mexico’s farm ministry lowered its own estimate for 2012 production on Tuesday to 21.8m tonnes, well below the 25m tonnes initially hoped for.

Read more at Agrimoney

Romania’s corn harvest rose 26 percent in 2011, producing the biggest crop in seven years, according to a document published on the Agriculture Ministry’s website.

Farmers reaped 11.4 million metric tons of the grain from 6.2 million acres, the ministry said. The crop was the biggest since the 14.6 million tons gathered in 2004, the figures show.

“Romania has the potential to export about 10 million tons of corn and wheat, following the very good crop,” Agriculture Minister Valeriu Tabara said in a phone interview today. “The country has already exported about 2 million tons of grains so far.”

The Romanian farmers are seeking to take advantage of higher international grain prices and boost exports as they need money to invest in outdated machines, technology and buy fertilizers.

Romania’s wheat harvest increased 24 percent last year to about 7.2 million metric tons, the biggest crop in six years, the ministry’s data show.

South Africa already said today it’s importing yellow corn from Romania with two ships en-route to the Western Cape province, Reuters reported, citing Jannie de Villiers, the chief executive officer of Grain SA, a farmers’ group.

To contact the reporter on this story: Andra Timu in Bucharest at atimu@bloomberg.net.

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net

The quality of Ukraine’s wheat harvest declined this year, producing 40 percent to 45 percent of milling wheat, down from 60 percent last year, researcher UkrAgroConsult said.

The country’s harvest is expected to be 20.6 million metric tons, with more feed wheat and less milling wheat than last year, due to poor weather conditions, Kiev-based UkrAgroConsult said today.

Rainfall in the Ukraine has reduced the amount of land from which grains can be harvested by 5 to 8 percent, according to the Hydrometeorological Center.

Ukraine has 15.5 million hectares (38.3 million acres) planted with spring and winter grains for the 2011 harvest, according to state statistics committee data

Russian farmers may harvest as much as 56 million metric tons of wheat this year, the country’s Grain Union President Arkady Zlochevsky said, a third more than in 2010.