18th Jun 2012, by Agrimoney
Trigon Agri warned that "extremely dry" Russian weather, which has caused widespread concerns over winter grains, had dented its spring crop hopes too as fears revived over hot weather.
The Russian farm operator, which last month revealed it had written off 8,000 hectares of rapeseed following an initial dry spell in the autumn, said it had cut back on sunflower seedings at its Stavropol operations in the south of the country thanks to "drought conditions".
"The widely-reported extremely dry weather conditions during the spring have negatively affected the expected harvest area for the full year of 2012 as the group decided to cut back on the area in Stavropol due to be seeded with sunflower," Trigon said.
The decision cut to 86,000 hectares the company's estimate for its harvested area this year, below initial targets, and last year's 89,000 hectares.
'Hampering grain filling'
The comments come amid fresh concerns over the dry weather in Russia's south, a key grains production area which, being close to Black Sea ports, is particularly important for exports.
However, the conditions have been up to now seen as a problem for winter grains, rather than spring crops such as corn and sunflowers.
Agritel, the Paris-based consultancy with an office in Kiev, noted that while many parts of Russia and Ukraine received rains last week, "the south of Ukraine and Russia, as well as the Urals region, remain desperately dry".
"High temperatures are hampering grain filling with temperatures above 35 degrees Celsius for several hours by the end of last week" in southern parts of Russia and Ukraine, while topping 40 degrees Celsius in Volgograd.
Weather service WxRisk.com said "The southern district of Russia really cooked, as did the southern portions of the Volga were temperatures reached 40-42 Celsius in many locations."
And it forecast, after a cooler start to the week, further warm weather to come, with a "new round of impressive heat" due for south west Russia by the end of the week.
'About 25-30% smaller'
The grains crop in the Rostov region, north of Stavropol, may fall more than one-quarter year on year, Vyacheslav Vasilenko, the area's farm minister, said on Friday, citing reports from growers.
"I travel in the districts and speak to heads of farms," Mr Vasilenko said. "They say that the crop will be about 25-30% smaller than last year."
However, Trigon, which also has operations further east in Russia, said that its crops in other farms had been boosted by recent rains.
"In the other production regions, although weather conditions were unusually dry with the group experiencing above-normal temperatures and below-normal rain in April and May, the situation has been relieved by rainfall towards the end of May and early June," the company said.
Price boost
Furthermore, it stood to benefit from price increases fuelled by the dry weather, with wheat prices standing 19% higher in Ukraine, and 40% higher in Russia, than the levels it achieved last year.
"If prices remain at current levels or better in the second half of the current financial year, the group is well positioned to show a strong improvement on its full year 2012 financial results," Trigon said.
Trigon shares, which are listed in Stockholm, stood unchanged at SEK6.85 in morning deals.
Trigon Agri warned that "extremely dry" Russian weather, which has caused widespread concerns over winter grains, had dented its spring crop hopes too as fears revived over hot weather.
The Russian farm operator, which last month revealed it had written off 8,000 hectares of rapeseed following an initial dry spell in the autumn, said it had cut back on sunflower seedings at its Stavropol operations in the south of the country thanks to "drought conditions".
"The widely-reported extremely dry weather conditions during the spring have negatively affected the expected harvest area for the full year of 2012 as the group decided to cut back on the area in Stavropol due to be seeded with sunflower," Trigon said.
The decision cut to 86,000 hectares the company's estimate for its harvested area this year, below initial targets, and last year's 89,000 hectares.
'Hampering grain filling'
The comments come amid fresh concerns over the dry weather in Russia's south, a key grains production area which, being close to Black Sea ports, is particularly important for exports.
However, the conditions have been up to now seen as a problem for winter grains, rather than spring crops such as corn and sunflowers.
Agritel, the Paris-based consultancy with an office in Kiev, noted that while many parts of Russia and Ukraine received rains last week, "the south of Ukraine and Russia, as well as the Urals region, remain desperately dry".
"High temperatures are hampering grain filling with temperatures above 35 degrees Celsius for several hours by the end of last week" in southern parts of Russia and Ukraine, while topping 40 degrees Celsius in Volgograd.
Weather service WxRisk.com said "The southern district of Russia really cooked, as did the southern portions of the Volga were temperatures reached 40-42 Celsius in many locations."
And it forecast, after a cooler start to the week, further warm weather to come, with a "new round of impressive heat" due for south west Russia by the end of the week.
'About 25-30% smaller'
The grains crop in the Rostov region, north of Stavropol, may fall more than one-quarter year on year, Vyacheslav Vasilenko, the area's farm minister, said on Friday, citing reports from growers.
"I travel in the districts and speak to heads of farms," Mr Vasilenko said. "They say that the crop will be about 25-30% smaller than last year."
However, Trigon, which also has operations further east in Russia, said that its crops in other farms had been boosted by recent rains.
"In the other production regions, although weather conditions were unusually dry with the group experiencing above-normal temperatures and below-normal rain in April and May, the situation has been relieved by rainfall towards the end of May and early June," the company said.
Price boost
Furthermore, it stood to benefit from price increases fuelled by the dry weather, with wheat prices standing 19% higher in Ukraine, and 40% higher in Russia, than the levels it achieved last year.
"If prices remain at current levels or better in the second half of the current financial year, the group is well positioned to show a strong improvement on its full year 2012 financial results," Trigon said.
Trigon shares, which are listed in Stockholm, stood unchanged at SEK6.85 in morning deals.
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