November 25, 2009


Russia grain prices face difficulty in going up



Grain prices in Russia will not increase easily due to large stocks and poor export infrastructure, according to Black Earth Farming.


Domestic grain prices are in danger of going very low, as local demand is flat and there are little alternatives for storing or selling abroad.


Last year's grain purchases through state intervention had take up significant silo capacity, besides landing the government with unforeseen storage costs.


Exports still face a limiting factor in Russia's export infrastructure, and shipments could reach 18 million tonnes. Russia's grain production forecast this year is estimated at 100 million tonnes.


The European Bank for Reconstruction and Development said in June that Russia's infrastructure was "not fully prepared" while UK cereals marketing body HGCA notes Russia's "problems with rail capacity and port terminal storage".

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