Russian Winter Grain Sowing Set to Increase Despite Economic Crisis

Russia is on pace to see an increase in winter grain sowing for the 2016 season despite the ongoing economic crisis in the country, due to high domestic prices, according to SovEcon. The Agriculture Ministry is expecting winter crops to be sown on 17.1 million hectares, compared to 16.8 million hectares last season.

"The increase in prices for agriculture inputs has been lagging the growth in domestic rouble prices for grain," said Andrey Sizov, head of SovEcon. "All in all, farmers are doing relatively well now."

The drop in global oil prices has held back the increase in rouble price for inputs such as pesticides, fertilizers and fuel, resulting in production costs for Russian farmers increasing by approximately 10% to 15%, according to SovEcon, which domestic prices for third class wheat have increased 35% year on year to 10,100 roubles, or $150 per ton.

As of September 7, Russian farmers had sown 5 million hectares, compared with 4.4 million hectares at the same point last year with sowing running ahead of pace due to favorable weather conditions in Tatarstan and Volgograd.