Season of records in Russia – A.Korbut

Source

APK-Inform

1891


In the first three months of 2014/15 season, the Russian grain market has been characterized by the expectations of wheat nearly record general production, the high demand for grain faced by the importers, record temps of the field works and historically large-scale exports. Alexander Korbut – the Vice President of Russian Grain Union has told about the grain market development trends in 2014/15 MY.

 

- In 2014, Russia to harvest nearly 100 mln tonnes of grains, and what is your forecast for 2014/15 MY?

According to the Russian Grain Union estimation, in 2014 the grain harvest will exceed last year rate and total 103-105 mln tonnes. This rate could be higher owing the maize crop increase. However, due to the rainless weather conditions in July 2014, the maize did not completely mature though we expect the stated rated still at the record level.

According to the preliminary data, in Siberia and Southern Urals, the grain harvest will be lower than the average annual rate. However, the regional market needs will be provided, thus we do not plan to import Kazakh grain to Siberia. Besides, there are some grain deliveries to Kazakhstan. But still it is better to estimate the crop after harvesting campaign ending.

 

- What is the wheat quality in 2014 season and what is the milling and feed wheat ratio?

In 2014, the wheat quality is at the average annual level – the 3 and 4 grade milling wheat share totals nearly 75%. According to the harvesting campaign results, in Siberia the wheat quality will improve. Meanwhile, owing the grain specific weight increase and the grain maturation,we fix the albuminous nitrogen content increase (the ratio gluten/protein content increase) and baking quality improvement on rheological rates (the ratio elasticity/stretchability). But the final estimation will be presented after the quality testing being held by the Ministry of Agriculture.

 

- What is the grains domestic consumption level in the current season?

The domestic consumption will not change. It is possible the barley consumption will increase but the grain consumption for feed purposes will be lower than animal production rate due to the African hog plague causing the livestock decrease. Thus, there is a grain consumption reduction.

 

- How can you characterize the trading and purchasing activity in the beginning of 2014/15 grain season?

In the beginning of 2014/15 season the trading and purchasing activity was at the high level, Russia exported record volumes of grains. Thus, there is a high competition among traders causing the prices increase. Besides the USD rate weakening allows to save the export activity and to extend the purchases' geography.

 

- What will be market further development due to the grain supplies limitation, affection the prices and and processing sector functioning?

In this situation, the exporters' demand is the main factor. Besides, the primary trades provided the finical resources for agrarians thus, the storage capacities were discharged. Further the agrarians will need the current capital to repay a credit so the trades will become more intense.

 

- What is the demand for Russian grain and its competitiveness on the global market?

The global market is now facing a rather high demand. According to our estimates, in the current season the exports will total 32-33 mln tonnes (wheat will remain the main export crop, maize exports will total 4.5 mln tonnes, barley – 3.5 mln tonnes). Note, the grain prices are not very high and they will decrease under the export activity decline. Besides, the global market prices decreased causing the Russian export market prices lowering.

 

- Are there any difficulties in the grain infrastructure? Which problems should be solved in thissector?

In the recent few years business has been able to solve the Russian grain infrastructure development issues. Nowadays it is possible to ship 50 mln tonnes of the product, meanwhile its shipment capacities will increase. Thus, there are new projects on grain terminal restoration in the Black Sea ports. But of course there are problems in infrastructure’s functioning to solve. At first it is necessary to create the grain storage and drying capacities at agrarians. Moreover, the Federal Road Agency intends to limit the trucks' carrying capacity for grain shipments and provides interdictions.

 

- How will the new economic situation influence on the grain market?

The Government does not support the grain market, so we hope the cattle breeding enterprises will increase the domestic demand. The Government program changes, as the partial compensation of agrarians' expenses for machinery’s purchasing, should induce the fleet renewal. Besides, there are propositions to consolidate the government influence on the bank credit policy and financial resources availability for agrarians.

 

- What factors will impact the Russian grain market functioning in the 2014/15 season?

The main factor is the global market influence but there are common reasons, as the USD rate policy, the agrarians' government support, the credit availability and interest rate, the winter crop planting results.

 

Interviewedby Elena Cherdnichenko

 

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