Russia’s grain exports will better the record breaking total posted for 2016-17 according to Rostat, despite concerns about handling capacity of Russia’s major grain handling ports.
Russian grain exports are expected to reach up to 52 million tonnes for 2017-18, up more than 40% on a year earlier, and likely to make the nation the world’s leading grain exporter.
Total Russian grain harvests are expected to reach 135.393 million tons in the 2017-18 season, including 85.9 million tons of wheat. That is placing pressure on the nations export infrastructure, most notably loading facilities at Novorossisk, but Ministry of Agriculture spokesman, Anatoly Kutsenko stated that despite a previous capacity of 36 million tonnes 52 million will be managed.
The news underpins Russia’s expanding place in global grain markets, with Egyptian state buyer GASC tapping Russian supply for a 240,000 tonne wheat order placed this week, and Russian produce placing pressure on Australian grain in South East Asian markets, and likely to subdue global prices, despite rising expectations of a drought in the US, according to Rabobank’s Stefan Vogel.
‘The short term wheat price outlook has improved due to yield risk in the US from dry weather conditions, but Black Sea region crops again have good growing conditions, and these pose the largest risk of downside for physical wheat prices.
The good news is for now prices are supported, but for how long? At the end of the day, the Russian crop will tell us where prices need to be.
It might not matter how long there is dryness in the US; it will be a matter of what your export competition is doing and that will come out of the region of Russia.’
Yevgeny Akhlashev from the Agriculture Ministry says exports are expected to reach $40 billion by 2025, building on sustained increases in domestic production which have seen sugar (73%) meat (36%) and cheese products (29%) imports fall significantly over the last 3 years.