August 16, 2012

 

 

In case the current high pace of exports continues in coming months, Russia's exportable grain surplus of 10-11 million tonnes could run out by November, fanning fears of an export ban.

 

SovEcon expects Russia to export 2.5-3.0 million tonnes of grain in August and the same amount in September, up from 2.13 million in July.

 

Russia's wheat is competitive on global markets at current prices, but its domestic market could become more attractive later, when the high pace of exports exhausts its exportable surplus and drives domestic prices up, SovEcon added on Wednesday (Aug 15).

 

Global corn and wheat prices rose about 50% and soy by around 20% in the six weeks to the end of July as US crops were scorched by heat and drought.

 

Leading wheat importers Egypt and Algeria seized a modest correction in grains prices this week to resume buying, which traders said reflected fears that high prices are here to stay due to the US drought and to expectations that Russia could limit exports.

 

Egypt's General Authority for Supply Commodities (GASC), the grain purchasing agency for the world's top wheat importer, bought Ukrainian and Russian wheat on Tuesday (Aug 14), its second purchase since prices began to retreat on Friday (Aug 10).

 

Russian Deputy Prime Minister Arkady Dvorkovich said last week that Russia had no grounds to ban grain exports, but he did not rule out the possibility of protective export tariffs after the end of the 2012 calendar year.

 

In July, Russia exported 1.8 million tonnes of wheat, the largest volume since December 2011 and the second-largest after July 2011. Barley exports reached 218,900 tonnes in July, the second-largest volume after July 2009, SovEcon said.

 

Russian officials have estimated the 2012-13 grain exportable surplus at 10-12 million tonnes, with the grain crop forecast at 75-80 million tonnes, down from last year's 94 million.

 

SovEcon said on Wednesday (Aug 15) it had slightly cut Russia's 2012 grain crop forecast to 70-74 million tonnes, from the previously expected 72-75 million but had not yet reduced its wheat estimate.

 

Meanwhile, Russian grain yields have fallen by 28.6% from last year's, with 47% of the harvest complete as of August 14, Russian Agriculture Ministry data obtained by Reuters showed on Wednesday (Aug 15).

 

By Tuesday (Aug 14), Russia had harvested 43 million tonnes of grain by bunker weight, the data showed.

 

Wheat yields were down 30.5% at 2.21 tonnes per hectare with 27 million tonnes threshed, the data showed. Barley yields fell 22.2% to 1.93 tonnes per hectare with nine million tonnes threshed.

 

The country also started the sowing of winter grains, the data showed, with 0.4% of the area complete. Russia plans to sow 16.8 million hectares with winter grains for its 2013 crop, up from last year's 16.1 million hectares.