Smaller Russian Crops Forecast

WINNIPEG - Jan 5/06 - SNS -- Russian grain output is expected to slide from 82.4 million metric tons (MT) last year to a forecast 78.2 million MT in 2006-07, argues Arthur Friesen, Senior Market Analyst with Agriculture Canada's market analysis branch here, who expects lower yields to offset increased area.

While production at this level will allow Russia to remain a major grain exporter in the coming, season, its "potential as a competitor in the world market for grain is currently constrained by the shortage of reliable farm machinery," Friesen said.

The current supply of farm equipment is deteriorating quicker than it is being replaced due to the heavy debt load that more than half of Russia farms are carrying. As a result, these farmers are unable to secure the large, long-term loans needed to purchase the farm equipment and storage facilities required to compete with other major grain producers in the world.

"Infrastructure constraints include inadequate storage facilities and a road system which is in serious need of upgrading," Friesen said.

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