October 27, 2011

Russian grain exports to fall

In spite of establishing a new record in September by exporting 3.8 million tonnes of grain including flour in grain equivalent, SoyEcon expects October's exports to decrease to 3.4 million tonnes and November and December's exports to decline further.

Wheat exports in September were also a record 3.3 million tonnes, some 340,000 tonnes above the previous record set in August. In October, exports may decline to 2.9 million tonnes, which will still be above the previous 2008/09 and 2009/10 highs.

SovEcon expects total wheat exports in the first four months of the 2011/12 crop year to reach around 11.4 million tonnes.

The number of buyers of Russian wheat rose to 51 in September with Egypt as the main buyer.

Barley exports in September rose by 126,000 tonnes from August to over 500,000 tonnes, achieved through an increase in the geography of sales.

The share of the main buyer, Saudi Arabia, declined, but Russia has managed to ship substantial volumes to Sudan and Iran.

The record export volumes result from low prices for Russian grain, primarily for wheat. But the situation is changing as the start of the rouble strengthening may cut the competitiveness of Russian grain.

A rapid decline of grain stocks in regions located close to the main export ports, by 5% on year in the Southern Federal District and by 16.5%, in the leading exporting region of Krasnodar, means traders are likely to seek grain elsewhere.

But even with a lowered fee for grain shipments by rail for Siberia and the Urals Kurgan region, massive shipments are contained by a shortage of railway wagons, which increases the time of shipments and logistics costs.