Heavy rains and flooding in July have delayed harvesting and caused significant crop losses in the worst affected southern areas. Latest estimates indicate that some 120 000 hectares of cereals have been destroyed which, based on average yield expected, could cut the potential 1997 harvest by some 500 000 to 1 million tons, mainly spring wheat and barley and, to a lesser extent, rye. However, earlier potential of the crops was pointing to another good harvest, and even accounting for the recent losses, the latest official forecast in August puts the 1997 cereal output at about 24.5 million tons, compared to 25 million tons in 1996. The government has said that there should be no risk of grain shortages in the current year as, even after the expected losses, the aggregate 1997 cereal output would still be a good level and a high level of reserves are currently being held by the state's Agriculture Market Agency (ARR) and grain wholesalers.