58 



could be met by imports, or by domestic production if agriculture reforms are 

 implemented. 



The high import demand stems from ambitious plans to increase consumption 

 of livestock products, with its heavy dependence on grain for feed. As 

 reforms take hold, the demand should fall. 



This year wheat production in Russia was up 15 percent, but the Russian 

 Federation purchased from producers only 26 percent of the crop for 

 distribution to urban areas — a new low due to low prices paid by the State, 

 which has encouraged Russian fanners to hold some 5-7 MT of grains on farms. 

 Low procurement from domestic production puts pressure on the central 

 government to alter domestic agricultural policy or import to secure stable 

 grain supplies for the State-controlled system still used to feed cities. 

 Recent proposed changes to the Russian Federation's domestic procurement 

 system, if implemented, may improve future procurements after harvesting 

 begins this summer. 



Relative to historical levels, U.S. wheat exports to the former Soviet 

 Union will hold up fairly well this year. In the past six marketing years, 

 shipments of U.S. wheat to the former Soviet Union have averaged 5.1 million 

 tons annually. Commitments this year so far are around 4.5 million tons. 

 Another 2-3 MT have been approved but not shipped. 



