Russian grain exports will slow down dramatically in the second half of the 2011-12 marketing year, the U.S. Department of Agriculture's Moscow attache said in a report released Wednesday, as domestic demand remains strong and available stocks have decreased.

The country's grain exports surged during the first half of the year, with more than 18 million metric tons of grain and pulses--including 14.8 million tons of wheat--being shipped from July to December, but the USDA said exports are expected to fade from January to June.

The export potential of Russia's three major southern provinces is largely complete, the USDA said, and exports from these areas will be almost non-existent for the rest of the marketing year. Meanwhile, shipping grain for export from the Ural and Siberian parts of the country remains unprofitable despite the low price of wheat in these provinces, the USDA said.

Even if sufficient grain was available, the USDA said harsh weather means freezing Russian ports must work far below capacity during the winter. Indeed, much of Russia's grain shipments from small river ports in the south of the country could be delayed due to icy conditions, a Swiss-based trader told Dow Jones Newswires Monday.

The USDA added that domestic demand for grain remains strong due to the development of its poultry and pig industries, while the stabilization of the dairy industry in Russia has also helped support domestic prices.

-By Michael Haddon, Dow Jones Newswires; 4420-7842-9289; michael.haddon@dowjones.com

(END) Dow Jones Newswires

January 25, 2012 06:00 ET (11:00 GMT)