June 15, 2011

 

Russia may export eight million tonnes of grain in autumn

 

 

Russia may export around eight million tonnes of grain in July-September, although its exportable surplus is expected to be significantly higher, the head of the Russian main grain industry lobby said on Tuesday (Jun 14).

 

"During the main shipment months, July-September, Russia may export around eight million tonnes of grain," Arkady Zlochevsky, the president of the lobby, the Russian Grain Union, said.

 

"We see the main exports potential in summer-autumn," he said.

 

He declined to give the total volume of exports in the coming 2011-12 crop year, which starts on July 1, the day Moscow ends the grain export ban imposed in August 2010 after the country was hit by a severe drought.

 

Russia can harvest 85 million tonnes of grain in 2011 if conditions are favourable, according to a recent forecast from the agriculture ministry. Zlochevsky said that he generally agreed with the forecast.

 

"However, the harvest may be as large as 90 million tonnes if we have luck with the weather," he said.

 

Zlochevsky said recent rains have improved the crop outlook for the central Russian grain-growing regions, worst hit by last year's drought and which have suffered from shortages of soil moisture this year.

 

He added that Russia is expected to have more than sufficient grain for domestic consumption this year and a big exportable surplus.

 

"Even if we harvest 85 million tonnes, with the carry-over stocks of over 20 million tonnes, we will not consume more than 67.4 million tonnes," Zlochevsky said.

 

"Next year, carry-over stocks will be no less than 16-17 million. Therefore we could potentially export 25 million tonnes."

 

But actual exports will be lower, although the throughput capacity of Russian sea ports is around four million tonnes a month.

 

Russia's underdeveloped rail and road infrastructure will cut exports as well as storms and ice in winter, which will stop river navigation, Zlochevsky said.

 

Buyers will not hurry to import Russian grain and will demand lower prices because of possible restrictions, he said.

 

"The exporters, of course, will try to ship as much as possible for fear of possible setting of tariffs," Zlochevsky said.

 

The Russian government is examining setting up a floating tariff on grain exports to prevent excessive shipments. Zlochevsky said he did not support any restrictions but added that a floating tariff would be the least painful measure.

 

He said, the floating tariff if set should be pegged not to international prices but to domestic ones.

 

"With prices for fourth-grade wheat (Russia's main export cereal) of up to RUB6,500 (US$233.3) per tonne the tariff should be equal to zero, and if they are higher the tariff should be equal to the difference between the actual price and RUB6,500 (US$223.3)," Zlochevsky said.

 

"But we see no need to introduce any tariffs in the coming crop year," he added.