Russian government cuts grain harvest forecast to 100-105 million tons

The ministry of agriculture cut its forecast for the grain harvest this year to 100-105 million tons from 110 millionn projected earlier. The reason is colder than usual weather in May, which affected the expected harvest in many areas. The new forecast of the ministry still means a relatively good harvest, on par with the result in 2015, but it would be significantly down from the record high 120.6mn tons collected last year, thus putting downward pressure on GDP growth. Agriculture had 4.1% share in 2016 GDP and it rose by 3.6%, contributing 0.1pps to GDP growth. This year we are likely to see small contraction in the sector due to the lower expected harvest.

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