APK-Inform took the interview at Igor Pavenskiy, head of the analytical department of the largest rail infrastructure operator in the area of grain rail transportation in Russia – Rusagrotrans, to clear up some issues in the sector of Russian agricultural crops transportation.
- Grain market activity mostly depends on its important chain – railway transportation. How is the fleet of the Russian cars ready for the current crop grain transportation?
As of beginning of June 2013 the number of grain cars in Russia total 38 thsd, and only 27 thsd are for grain transportation (i.e. not grain only but also meal, marc, mixed-feed and other), the remained cars are for other bulked cargoes. Besides the certain cars are under repair. Note the current fleet of grain cars is rather sufficient. But it is necessary to consider the market volatility, considering good crop of grains and oilseeds in Russia and Kazakhstan and close to record one in Ukraine. It seems to me in the next months there will be high demand for grain cars.
- In order to continue our conversation please let us know of your opinion on the recent changes of the order of grain cars service life extension? Is it reasonable?
On the one hand on the market there is oversupply of the universal rolling stock due to the high investments into new cars purchasing in the pre-crisis period. The reason is that the surplus decreases the speed, and if there are poorly repaired cars – the safety. But it is actual for the surplus rolling stock, but grain cars are not under the stated category. If you take out 5-6 thsd units from the market it will have the negative impact on the transportation, due to the current volatility on the grain market and the current elevator and port infrastructure do not allow to increase grain cars turnover by fulfilling transportation with the smaller fleet. Besides it can cause the essential threat for the domestic consumers provision and the export contracts fulfilling. There is general understanding of the all above stated for all the market participants, so we should not expect any radical measures. I think it is OK and there is enough fleet for everyone.
- How large is the difference between the railway transportation work in the current and past seasons? Can you share with us any preliminary conclusion?
Due to the certain market reasons, the transportation will be distributed equally in comparison with the previous season, meanwhile the largest part of grain for export was supplied in July-November. Owing more flexible tariffs the share of the railway transportation for small ports is growing. Besides note good crop of grains in Kazakhstan provided us with the transit transportation increase to 3.5 mln tonnes as opposed to 1.5 mln tonnes last year.
- In Kazakhstan there is the affiliated company of Rusagrotrans. Does the company plan to enter the Ukrainian market of the transportation?
Yes, in Kazakhstan since the beginning of the current season in September there has being worked the joint (not the affiliated) company of Rusagrotrans and KazTemirTrans – Astyk Trans to allow companies to use the fleet more efficiency in the conditions of the different seasonality in Russia and Kazakhstan. The stated joint project to provide the access for Kazakhstan producers and exporters to the main sales markets throughout the ports of Azov-Black Sea basin and Baltic to satisfy the demand of flour millers for Kazakh wheat in the neighbour regions and Kazakh consumers in feed grain, to provide the investments into renewal and cars fleet repair needed to be finished in the shortest time. Besides it will improve the integration of the two countries on the grain market.
As for the Ukrainian market, we are interested in cooperation of the transportation. We are willing to supply grain and alike cargoes to the Ukrainian ports. To date we pay a lot of attention on the developing of our representative office in Ukraine.
- In order to finish our conversation please tell of your view of the new season.
Crop 2013-14 potential is rather high owing the winter sowings conditions improve and the grain planted areas increase. But still there are the certain weather problems being able to cause the stated rate decrease.
Thus in 2013 the share of 3 grade wheat will fall in favor of feed wheat and 4th class wheat. But still it is unnecessary to overstate the problem because it will be only in the Volga and Ural regions. So there is no expected any shortage of milling wheat for domestic consumption and exports as well.
But still another rate of the expected grain production increase is maize and whether its crop will rise or not to be know very soon. According to the forecast maize harvest to total 9.8-10 mln tonnes.
- What should we expect from the export potential?
According to our forecast, in 2013/14 season the export to total nearly 20-22 mln tonnes as opposed to 16.4 mln tones in the previous season, including wheat – 15-16 mln tonnes, barley – 2 mln tonnes, maize – 2.5-3 mln tonnes, leguminous – 0.8 mln tonnes, flour – 0.3 mln tonnes. But it is necessary to consider the intervention purchasing. If there are ones of nearly 2-3 mln tonnes the Russian grain exports to decrease.
Of course we expect railway transportation increase – to 7-7.5 mln tonnes as opposed to 4.6 mln tonnes in 2012/13 MY.
Interviewed by Olga Ramazanova
