Russia will need to import food products as growing domestic consumption outstrips a forecast increase in agricultural production, Deputy Economy Minister Andrei Klepach said on Friday. Russian farm production should increase by between 8 percent and 8.5 percent this year, provided the grain harvest hits its target of 80 million to 85 million tonnes, Klepach said.
Thereafter, annual growth should stabilise at between 3 percent and 3.5 percent. "There is room for imports," Klepach told a grains conference in the Altai region of Siberia, without specifying a time period or the products most likely to be imported. Russia, with around a tenth of the world's arable land, banned grain exports in the wake of a catastrophic drought last year that wiped out more than a third of its grain crop. Officials will soon debate whether to extend the ban beyond July 1.
The ban, aimed at ensuring domestic supplies and restraining inflation, caused a spike in global wheat prices. Inflation has also surged in Russia, despite the ban and grain intervention sales, which have poured 200,000 tonnes onto the local market. Despite a state farm aid package and fuel price cuts for farmers, Russia's agro-industrial bloc, whose creditworthiness is in doubt after the drought, needs 220 billion roubles ($7.59 billion) in financing for the 2011/2012 season.
The Agriculture Ministry forecasts a 2011 grain harvest of 85 million tonnes, which would be a 39 percent increase on last year's drought-ravaged crop and leave a small exportable surplus after domestic consumption and restocking. An 85 million-tonne harvest would leave Russia with a surplus of 15 million tonnes, but exports would likely be less, at 7-8 million tonnes, as Russia will need to rebuild stocks.