Russian Government rushes to expand grain handling facilities as export forecasts soar


Russia's agriculture minister has revealed the Government will further expand its export infrastructure by building facilities further from the city.

It follows an earlier announcement from Alexander Tkachev that Russia would produce its largest crop in 25 years, with current estimates putting the harvest at a record 117 million tonnes.

Construction projects at ports in Russia aim to lift its export capacity to 150 million tonnes by 2030, with the Government already expanding it to 45 million tonnes this season.

Low ocean freight rates combined with grain prices at six-year lows have seen waves of Russian grain wash out competitors in key import destinations in the Middle East and North Africa, and around South-East Asia and northern Asia, where Australia traditionally enjoys a natural advantage.

But the poor prices for grain will also see farmers in Australia, Europe and North America choose to store their grain and wait for the market to turn up.

That is a luxury Russian farmers do not have, forcing the large volumes onto the international market this season.

Earlier this year a report from the United States Department of Agriculture's (USDA) Economic Research Service tipped Russia would unseat the European Union as the world's largest wheat exporter.

    "The gains by Russia and the EU in the global wheat market come mainly at the expense of the United States, whose share of world wheat trade is trending lower," the report read.

But in the USDA's latest World Agricultural Supply and Demand Estimates, officials expected Russian exports to drop by 1 million metric tonnes, because of difficulties in getting grain into ships.

Forecasters around the globe, including Australia's official commodity forecaster, ABARES, are predicting Australia's harvest to break a record, with production tipped at 32.6 million tonnes.


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