November 12, 2008

Russian grain exports in October fell to 2.45 million tonnes from 2.97 million tonnes in September.

Wheat exports in October fell to 2.2 million tonnes from 2.63 million tonnes in September and 2.84 million tonnes in October 2007.

Grain exports are expected to keep declining in November and December due to the credit crunch and lower world grain prices.

Exports to the traditional markets of Egypt, Turkey, Jordan, Azerbaijan and Middle Eastern countries have fallen as they have already purchased substantial grain volumes.

Importing countries now prefer buying small shipments at current market prices as they wait for further price declines. Activities have also been restricted due to the financial crisis, which makes it difficult to finance grain purchases. Bad weather at the Black Sea and Azov Sea ports is also likely to push exports down in the last two months of 2008.

Under these conditions, Russian farmers are instead selling their grain to the government.