June 19, 2012
Despite a relatively low crop estimate, the wheat exports of Russia is seen to be high with factors including the country's entry to the World Trade Organization (WTO) to boost cargoes, according to Agritel.
The analysis group, which in May forecast this year's Russian wheat crop at 50-53 million tonnes, on Friday (June 15) narrowed its estimate towards the bottom of the range, at 50.5 million tonnes.
That is below estimates from other commentators including SovEcon, which has pegged the crop at 53 million tonnes, and the USDA, which on Tuesday cut its forecast by three million tonnes, also to 53 million tonnes.
While recent rain had boosted hopes for spring crops, dryness earlier in the season had already "penalised" crops, and winter grains in regions such as Krasnodar, Lipetsk and Voronezh remain in a "delicate" position, Agritel said, in comments made following a crop tour.
However, the Paris-based group, which has an office in Kiev, was relatively upbeat on Russia's wheat export prospects, citing in part the prospect of healthy supplies of the grain left over from last year's bumper harvest.
It also flagged the boost to Russia's export industry from the country's forthcoming membership of the WTO, which will curtail the country's freedom to impose export restrictions as it did in 2010.
Russia's parliament will in early July debate membership proposals, with the idea of signing off on a deal by July 23.
"Once becoming a member of this organisation, it is clear that the establishment of artificial regulations, for example quotas, export taxes, will be more difficult to justify," Agritel said.
"With wheat ending stocks expected at around 10 million tonnes, the country should be able to export 16 million tonnes of wheat during the coming campaign," Agritel said.
That figure is in line with the USDA estimate, and ahead of the 14 million tonnes forecast by SovEcon.
However, it will require success by merchants in sourcing wheat from regions outside the Russian South, typically a large source of export supplies, but among areas where crops have been damaged by drought.
Agritel was also relatively upbeat on Russia's overall grains harvest, estimating it at 90 million tonnes, down from 94.2 million tonnes in 2011, compared with a SovEcon forecast of 87-91 million tonnes.
Recent rains had improved hopes of decent spring crop yields "if they receive water enough until the harvest".
The Ukraine wheat harvest was pegged at 12.9 million tonnes, in line with a USDA forecast of 13.0 million tonnes.