russia a victim to a 10mmt grain swindle?

This came through this morning in a MFGlobal Grains News e-letter. No source provided so can't provide sorry mods ... illustrates just how much dishonesty is rife amongst grain inventory reports. Its taken a disaster of a year for production to bring it all to a head ... watching grain and fertilizer markets with interest. Notice rice is also starting to stir ...

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Has Russia been victim to a 10m tonne Grain Swindle?

It would seem there could have been a heist of more than 10m tonnes of grain from under officials' noses? That's one interpretation of the array of inventory estimates emerging from the drought-afflicted agricultural powerhouse. While Russia's farm ministry was on Friday scouring every barn and trough for extra crop, bringing its estimate of the country's grain stockpile to 25.8m tonnes as of July 1, compared with the 21.7m tonnes estimated by government statisticians, US officials had an altogether more gloomy take. The US Department of Agriculture's Moscow bureau only managed to get to 15.5m tonnes before running out of further barley, corn, millet, oats, rice, rye or wheat to count.

'Very confused'

The difference, which Agrimoney.com has been told reflects increasing caution in the bureau since May over Russia's stocks, is more than academic. Should the bureau prove right, Russia could be on track to import some 10m tonnes of grain in 2010-11, factoring in data from SovEcon, which Agrimoney.com will take as an independent observer. The USDA's own sums see Russia remaining a small net exporter, although this assumes domestic consumptioin of less than 70m tonnes, below many other estimates, and a harvest forecast of 62.3m tonnes. The dispute over Russia's import prospects has been a major factor in the revival in wheat prices this week, with government officials talking down the need for any foreign purchases, while some analysts, including SovEcon, have talked of the potential requirement for 6m tonnes.

Too big

So who is right on stocks? According to SovEcon, which has been ahead of the curve on Russia's tortured crop dynamics this year, it certainly isn't Russia's farm ministry.

The analysis group itself believes that stocks began 2010-11 at 20.2m tonnes. The figure from beancounters at official statistics agency Rosstat are a little swollen by inclusion of early harvest from this year, SovEcon says, while questioning the use of farmyard sweepings in the farm ministry data. "I can understand their logic," Andrey Sizov, the SovEcon managing director, told Agrimoney.com. "But in previous years we have never considered these stocks to be in the market."

Incomprehensible

So are USDA officials correct? Their estimate is, after all, a little nearer to SovEcon's. It appears not. Mr Sizov said he could not understand their forecast "at all". It may be, of course, that USDA staff know something that others don't. Like, how exactly did America manage to raise its wheat production this year, despite a plunge in plantings to their lowest in nearly 40 years? END