Russian grain production to jump 60 per cent by 2030


AUSTRALIAN grain growers can expect greater competition from Russia in the world market.

According to a new report on Russia’s grain industry by the Australian Export Grains Innovation Centre, Russian grain exports are expected to increase by 60 per cent from 2015 to 2030.

AEGIC has forecast Russian wheat exports to jump 50 per cent from 21.7 million tonnes last year to 32.5 million tonnes in 2030.

Corn exports will almost triple in volume from 3.6 million tonnes to 9.7 million tonnes over the same period, while barley shipments are expected to rise a modest 20 per cent to 5.6 million tonnes.

“There is minimal overlap among Australia and Russia’s top 20 wheat customers, which have historically been the product of geography and ocean freight costs,” the report said.

“However, Russia is gradually exporting more wheat into Australia’s key South-East Asian markets.

“Russia has identified Morocco, Indonesia, the Philippines, South Korea, China and Algeria as important sources of future demand.

“Aside from Morocco, all these would be considered key Australian markets of ongoing or future importance.”

The AEGIC report said most of the extra Russian grain would come from yield improvement and potential expansion of cropping areas.

It said Russian wheat yields were low compared to other exporting nations — other than Australia — and its government had already begun reforming its agricultural research centres which should see better productivity gains in the industry.

Russia’s arable land area was two and a half times that of Australia and there were significant reserves of land, which could be planted to crops.

AEGIC said Russian Government policy during the past decade demonstrated a clear focus on improving food security, self-sufficiency and food affordability.

“However, the economic downturn since 2014, caused by falling energy prices and Western sanctions over Russia’s annexation of Crimea, has seen a small but important reweighting of these priorities as the government also looks to agriculture as a future source of economic prosperity,” it said.

“Increased grain production and exports from Russia are likely to lead to increased competition in Australia’s key grain markets and ultimately, lower farmgate prices for grain and a reduced incidence of Russian policy-induced price spikes.”

Readers choice: TOP-5 articles of the month by UkrAgroConsult