June 28, 2012

In the new season (July 2012-June 2013), Russia's grain export potential will fall to 18 million tonnes and lower, and the bulk of the grain will be exported before January 1, 2013, Rusagrotrans chief analyst Igor Pavensky forecasts.

Rusagrotrans' forecast for the 2012-13 total grain crops  was cut to 87.9 million tonnes from 89.4 million tonnes predicted before.

The crop will decrease substantially in the southern regions. A slight rise will be seen in Central Russia and the Volga federal district. A minor drop is forecast in Siberia, while Ural yields may lower to average values from last year's record.

"In view of a drop in grain stocks to 15.1 million tonnes as of the new crop year's beginning (July 1, 2012) from 16.8 million tonnes at the same time in 2011, and increasing demand, Russia's export potential may come to at most 18 million tonnes, said I.Pavensky. - This also results from a shrunk wheat share in the total crop and deteriorated wheat quality in the main wheat exporting regions, i.e. the Southern and North Caucasian federal districts."

I.Pavensky believes that, taking into account sharply expanded port facilities in Russia, on-going deliveries via the Baltic ports and favourable prices, the bulk of export grain (80-85%) will be shipped abroad by January 1, 2013. This will be followed by intensifying competition from the domestic market and exports will fall, he predicts.

Exports including peas may total about 27.4 million tonnes this season (2011-12), I.Pavensky expects.

"Despite an expected drop in May's exports to one million tonnes, roughly 1.4 million tonnes was exported that month," he said, noting that part of the export volume was represented by grain sold from the intervention fund. This grain will influence export volumes in June and July, too.