* Russia in talks to import 3 million T feed grain
* Sowing in 2011 may be hit by lack of fertiliser, equipment
* Govt grain stocks may be insufficient to cover demand
(Adds feed grain import plans)
By Aleksandras Budrys
MOSCOW, Nov 26 (Reuters) - Russia said it would import some 3 million tonnes of feed grain, while an industry lobby warned the situation in the once major exporter could be exacerbated by a shortage of fertiliser and equipment to sow spring crops.
Russia is in talks with Ukraine, Kazakhstan and the European Union on feed grain imports, an Agriculture Ministry spokesman told Reuters on Friday.
A drought this summer, the worst in more than a century, slashed Russia's grain harvest by 38 percent from last year's level to just 60.3 million tonnes, forcing the country that had been the world's third-largest wheat exporter to look abroad to meet domestic needs.
Moscow plans to buy around 2 million tonnes of grain in Ukraine, about 0.5 million tonnes in Kazakhstan and another 0.5 million elsewhere, most likely in the European Union, the spokesman said, adding that shipments of the grain may start next year.
The deficit of feed grain in Russia is around 5 million tonnes, but the share of fourth-grade wheat in the 2010 grain crop has risen, and part of it may be used for feed purposes, the spokesman said.
HAMPERED BY FERTILISER, MACHINERY
The government, which imposed a ban on grain exports from Aug. 15, 2010 to July 2011, has been counting on increasing the area sown with spring grain to compensate for a loss of winter crop area caused by the drought.
But such plans could be overly optimistic, Russian Grain Union lobby group president Arkady Zlochevsky said on Friday.
"There may be no increase in the (spring) sowing," Zlochevsky told an agricultural conference.
"Taking into account that we have less fertiliser than a year ago and we have stopped buying new machinery ... this will inevitably affect next year's crop."
Andrei Sizov Sr., president and chief executive of SovEcon agricultural analysts, told Reuters Insider television that next year's grain crop was likely to come in at 80 million tonnes, which is below average but probably enough for Russia to be self-sufficient.
He forecast that domestic prices would surge in January. "This will stimulate imports ... from neighbouring countries, mainly Ukraine and to some extent Kazakhstan," he said.
Given the high prices for feed grain, Russia may need less of it than previously. Zlochevsky said farmers had started mass slaughter of domestic animals.
He estimated that Russia's demand for grain would fall to 70 million tonnes this year from Rosstat's downwardly revised estimate of 72 million in 2009.
FAST ACTION NEEDED
Zlochevsky said farmers should have a profit margin of 40 percent to keep the crop volumes unchanged. "If it is above 40 percent, output rises. If it is below, it falls," he said, adding this year the average profit margin was below 40 percent.
The south of Russia has a surplus of 14 million tonnes of grain and Siberia 6 million, while regions along the Volga, in the centre and the northwest of Russia have a deficit of 18-19 million tonnes after the drought, Zlochevsky said.
"We should understand that it is technically impossible to ship the surplus from the south until the end of the season," he said. "Physically, 5 or even 6 million tonnes of southern grain will not be shipped out."
He added that outbreaks of highly contagious African Swine Fever disease in southern Russia posed another obstacle to shipments. Equipment to disinfect grain there was scarce.
"This means that the regions hit by the drought will soon eat their grain up," he said. "The situation is such that even the government intervention stocks, despite being huge, may prove to be insufficient to cover the acute demand."
Zlochevsky said that the government should act fast if it wants to implement its grain plans.
He proposed setting floating export tariffs on fertilisers to guarantee the necessary volumes for domestic consumption, curbing prices of oil and lubricants and changing the intervention purchases scheme.
"The government should guarantee minimum prices based on production costs like in Europe and in the United States, where the state guarantees it will buy any quantity of grain at these minimal prices," he said.
"This will stimulate investments and (bring in) technologies." (Editing by Anthony Barker and Jane Baird)