May 28, 2015

Russia's wheat harvest to drop to 55 million tonnes this year

At up to a volume of 55 million tonnes, Russia's wheat harvest in 2015 may fall from 60 million tonnes recorded last year, according to Arkady Zlochevsky, the head of the country's Grain Union.

Exports are likely to dip when the government introduces a floating wheat duty on July 1. A replacement for a previous tax introduced in February this year, the new duty will require exporters to pay an amount equivalent to half of the price (minus US$106) if the wheat price rises above US$218.2/tonne on a free-on-board basis.

This could bring exports of costly macaroni wheat to a halt, Andrey Sizov, the head of agriculture consultancy, SovEcon, said.

In the meantime, Russian wheat exports for the current marketing year could reach about 21 million tonnes, and in 2016, between 15-17 million tonnes.

According to Sizov, deliveries are expected to plunge by a "couple of million tonnes" from 20-21 million tonnes this season.