December 3, 2007

 

Russia 2007/08 wheat exports seen up, barley down

 

 

Russian wheat exports are expected to increase in the current 2007/08 crop year by 16.8 percent to 12.5 million tonnes while barley exports may fall 40 percent to 0.9 million tonnes, a leading analyst said on Friday (November 30).

 

Andrei Sizov Sr., CEO of SovEcon agricultural analysts, said Russia's grain crop this year was expected to have risen to some 82 million tonnes from 78.6 million last year, in line with the latest government estimate.

 

SovEcon estimates the wheat crop to have risen to 47.8 million tonnes from 47.3 million and barley output to have declined to 17.3 million tonnes from 18.15 million tonnes.

 

The preliminary official crop estimate by Russia's statistics agency FSSS is expected in the middle of December.

 

Sizov said that in the first five months since the season started in July, Russia had exported nine million tonnes of wheat, the same volume it exported in the first nine months of last season and seven months of 2002/03.

 

In 2002/03, Russia exported a record 14.2 million tonnes of wheat.

 

Sizov believes that Russia "will continue exporting at a record speed, and the halt of exports will depend on the setting of a (high) export tariff."

 

Russia has already set a 30 percent export tariff on barley, which has practically stopped being exported.

 

A tariff of 10 percent set on wheat and the start of the sale of government wheat stocks to the market have not affected exports and producers and the government are now considering setting a higher duty of 40 percent.

 

The timing of the higher tariff setting is not yet clear, but the market believes it will not happen this year.

 

Sizov said that if the government sets the tariff too late, it will result in a very tight domestic grain balance which will not be cushioned by government stocks, which are expected to be exhausted by March 2008.

 

SovEcon estimates that the ending wheat stocks in the current season may decline to 3.6 million tonnes from starting stocks of 5.95 million, while barley stocks will rise to 1.35 million tonnes from 0.85 million tonnes.