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Russia urges farmers to switch to gas from diesel, gasoline

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Russia urges farmers to switch to gas from diesel, gasoline

London — Russia's agrarian ministry is urging farmers to switch to more cost-effective natural gas from diesel and gasoline, it said in a statement Friday.

"In 2018, farmers acquired more than 5 million mt of motor fuel at a cost of over Rb270 billion [$4.23 billion]," minister of agriculture Dmitry Patrushev said. "Considering that gas is half of the price, the benefit is obvious to everybody."

Buying tractors and automobile equipment that run on natural gas, as well as refitting the existing equipment, could be done within thepreferential borrowing that is available to farmers.

Russian farmers predominantly use diesel but also use gasoline, with demand surging during the spring sowing works and the autumn harvest. Demand in the 2019 spring agricultural season was estimated at 1.9 million mt for diesel and 300,000 mt for gasoline, the ministry said previously.

Motor fuel represents 11% of the cost of winter wheat and 15% of spring wheat, the statement said.

Separately, the ministry said it estimates grain exports in the current agricultural year, starting in July, at 45 million mt, of which36 million mt wheat.

The grain harvest is expected at 120 million mt, up 6% on the year, and up from the previous forecast of 118 million mt.

It expects to export around 7-8 million mt of grain in November and December at around $1.5-$1.7 billion.

The government approved a long-term strategy earlier this year for the development of the grain complex up to 2035. It aims to increasegrain production by 33% compared with 2018 to 150.3 million mt/year, while export volumes are set to rise 16% to 63.6 million mt.

-- Elza Turner, elza.turner@spglobal.com

-- Edited by James Burgess, james.burgess@spglobal.com