October 17, 2008


Russia's carryover grain stocks may reach 22 million

Russia's carryover grain stocks could reach 22 million tonnes by July 1, 2009, up from 9.3 million tonnes on July 1, 2008, according to Russian Grain Union president Arkady Zlocheysky on Wednesday (October 15, 2008).


This level will exceed FAO recommendations, he said, and is the result of a record high grain harvest in Russia this year as well as a lack of infrastructure to export excess grains.


Zlocheysky said Russia could export 23-25 million tonnes of grain this year, but it would be difficult to capitalise on export opportunities to neighbouring countries since Ukraine also had a good harvest and is exporting its own grain, while exports via Baltic ports are too costly.


Russia may have at least 30 million tonnes of excess grain this year, and it is a problem because grain prices have plunged and there is no incentive to expand production, according to Zlocheysky.


Class-three wheat prices fell to RUB 5,700 per tonne from RUB 8,500 in January, while coarse grain prices dipped to RUB 3,200 from RUB 7,800.


Zlocheysky said grain futures on the Chicago exchange may hit the level of US$200 per tonne from the current US$203 per tonne. Grain is now sold for less than US$200 per tonne on the global market. Zlocheysky also projects gross grain harvest to total 107-108 million tonnes in net weight this year.


Corn is currently collected in southern Russia, with about 3 million tonnes harvested so far. Overall harvest is expected to total 6 million tonnes, and Russia has so far harvested 112 million tonnes in gross weight, which would guarantee 103-104 million tonnes in net weight, he said.


Zlocheysky expects wheat harvest to reach 62 million tonnes this year, gross barley harvest to reach 23 million tonnes while rye harvest to hit nearly 4 million tonnes.

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