December 17, 2011
Russia's grain output surge eases global prices
Armed with one-third rise in grain production this year, Russia's return to the global market this summer has contributed to a cut in world food prices, experts said.
Russia harvested 92 million tonnes of grain, a considerable increase compared to the 60.9 million tonnes in 2010. Last year the drought and the subsequent loss of large parts of the crops forced Russia to introduce a moratorium on grain exports. Grain exports resumed in July this year.
After 17 million tones of wheat have been exported, world food prices fell 1% comparing to November 2011, according to a report prepared by the Food and Agriculture Organisation (FAO) of the United Nations. Good estimates for 2012 have also contributed to the price cut, the report said.
"Our return became a very powerful factor indeed. The market became more competitive, suppliers lost the opportunity to dictate their will to consumers," said Alexander Korbut, vice-President of the Russian Grain Union. "Now almost 20% of the world grain trade belongs to Russia and the whole of the group of three - Russia, Ukraine and Kazakhstan," he added.
However, FAO experts do not expect grain prices to fall significantly as the demand for wheat remains high. Grain remains a key product in the world food basket, it is also essential for raising livestock, they stressed.