Europe

Droughts Wither Eastern and central Europe Crops
Reuters, June 21, 2000

Central and eastern Europe had been expected to deliver bigger harvests this year but the worst drought to hit the area in decades has damaged crops, pushed up prices and hit prospects for exports. Romania has been ravaged by heatwaves which have gripped the country since March. The farm ministry said drought had damaged 2.7 million hectares and destroyed more than 40 percent of output with losses amounting to the equivalent of $307 million. Drought has affected to a lesser extent Hungary, Poland, Russia and Ukraine and triggered wheat price rises across the region on fears of low supplies. Spells of dry weather in recent weeks forced Serbian farmers to race against time to harvest wheat and prompted Polish and Czech officials to consider wheat imports to meet demand. Official forecasts, which analysts see as optimistic, put Romania's 2000 wheat output at 3.7 million tonnes, barely enough to meet local demand. The ministry ruled out exports.

Traders said it was impossible to find big lots on the local market where prices doubled to four million lei ($189) a tonne. Russia hopes to bring in up to 69 million tonnes of wheat this year, despite a critical lack of soil moisture in main grain areas, according to Russia's Agriculture Ministry. Serbia said it expected a wheat output of 2.2 million tonnes, the worst harvest of the past 10 years. In Poland, where estimates put the 2000 wheat crop at some 23.2 million tonnes, the government offered cheap credit to farmers and planned extra grain imports to cap surging prices. In Prague, farm ministry spokesman Hugo Roland said the Czech republic might also import wheat if dry weather continued. ``Should there be drastic output decline, it is possible that such commodities will have to be imported,'' he told Reuters. Estimates put losses due to drought at 7.1 billion crowns ($189 million), the Czech Agriculture Ministry said. Hungarian traders said drought had driven up wheat prices on the Budapest Commodities Exchange to excessively high levels. Last week, the Ministry of Agriculture cut its wheat crop forecast to 3.95 million tonnes from an earlier projection of 4.0 to 4.5 million, but traders said they saw the 2000 output at some three million tonnes.