Russian grains powering ahead


DESPITE economic sanctions Russia is powering ahead in the global grains sector.

The plummeting Russian rouble, along with the sanctions, imposed by the US and the EU after Russia annexed parts of Ukraine, made grain imports less competitive in Russia and after several excellent seasons production has surged.

In its most recent crop report the USDA upgraded the Russian wheat crop estimate by 1 million tonnes from its September figure, to 82 million tonnes this season.

This is up 9.5 million tonnes on last year’s record harvest, and up a staggering 23 million tonnes from three years ago.

Another achievement for the Black Sea nation was that last year it eclipsed the US as the world’s largest exporter.

AvantAgri Australia grain analyst Malcolm Bartholomaeus said this year’s global production forecast was “all about Russia” because it was a big exporter and starting to sell into Asia, markets that were critical to Australia.

Mr Bartholomaeus said recent data showing the export destinations for US wheat had shifted from the Middle East and North Africa into Asia was partly a result of Russia’s larger export surplus.

The US Wheat Associates, in its newsletter last week, said in the past decade more US wheat had been sold into Japan, the Philippines, Indonesia and Vietnam and less into its traditional markets Egypt, Pakistan and Sri Lanka.

“The US can’t get any headway into the major Middle East and North African markets because of the Russians, and if the Russians can’t fill these orders, the (other) Europeans can,” Mr Bartholomaeus said.

Rabobank senior grains and oilseeds analyst Cheryl Kalisch Gordon there had been significant investment in the Russian grains sector from public and private arenas.

And she said the Russian Government recently announced plans to offer rail freight subsidies for grains.

But she said Russia still had significant logistics issues.

“There will be potential issues with their infrastructure (that) will prevent the exportable surplus from being higher than it is,” Dr Kalisch Gordon said.

The Weekly Times

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