September 21, 2012
Russia's grain exports to drop in October as stocks fall
Due to quickly falling stocks, Russia's grain exports are expected to fall in October, while bolstering domestic prices and upping the odds of import from its ex-Soviet neighbours.
"From October export volumes will start to decline rapidly," SovEcon said on Thursday (Sep 20), adding that it was too early to forecast how much grain could be exported next month.
In September, Russia is expected to export 3.0-3.1 million tonnes of grain, including flour equivalent and legumes, up from 2.9 million tonnes seen in August, according to SovEcon.
Russia, one of the world's leading wheat exporters, is trying to cope with a drought which has slashed yields by more than a quarter and has raised concerns it might repeat a 2010 export ban, helping drive global prices higher. Government officials have ruled out a grain export ban.
SovEcon expects Russia's 2012 wheat harvest to fall to 38 million tonnes, below the crop of 2010, when it brought in 41.5 million tonnes of wheat.
However, Russia's wheat can remain attractive for some countries in the Middle East and for its ex-Soviet South Caucasus neighbours, raising Russia's import surplus.
"Despite rising costs and prices, grain export from Russia is unlikely to stop. For a number of countries Russian wheat will remain attractive taking into account convenient and relatively inexpensive logistics," SovEcon said.
It expects that Iran, Syria, Turkey, Armenia, Azerbaijan and Georgia will continue to buy Russian origin.
"With no export limits in force... a situation is possible when grain export, mainly wheat export, could exceed the amount acceptable for supply and demand balance," SovEcon said.
"As a result, accelerated growth of domestic prices may make imports more attractive for some regions than purchases on the domestic market," it added.
SovEcon expects Russia to import 1.5 million tonnes of grain, including flour, this year, up from last year's one million tonnes.
