IKAR in Mass Media

Wheat export prospects brighten in Russia as harvest gathers pace

02 августа 2016 года

July 27 (Reuters) – Wheat export prospects have improved in Russia in recent weeks as favourable weather is keeping its projected record harvest on track with yields seen higher than a year ago, analysts and traders said.

Russia, the world’s second largest wheat exporter after the European Union in 2015/16, has been widely expected to harvest the largest wheat crop in its post-Soviet history in the 2016/17 marketing year, which started on July 1.

The recent upgrade in crop forecasts from the leading consultancies in Moscow – IKAR and SovEcon – to 68 million tonnes and 66 million tonnes, respectively, suggest that the exportable surplus will be higher than originally expected.

By July 25, Russian farmers had harvested 30 million tonnes of wheat before drying and cleaning from 26 percent of the total area, up from 24 million tonnes a year ago. The average yield is 4.16 tonnes per hectare so far versus 3.83 tonnes a year ago.

Russia is harvesting its record wheat crop amid concerns over the EU’s crop.

Neighbouring Ukraine has so far harvested 13 million tonnes of wheat from 54 percent of the total area and up from 10.3 million tonnes a year ago.

Crop quality in several of Russia’s southern regions is lower than a year ago and some farmers are holding wheat of high quality – the third class wheat – hoping that the price for it will rise in the coming months, said Igor Pavensky, the head of marketing at rail infrastructure operator Rusagrotrans.

However, more farmers are ready to sell their stocks, and the recent rouble weakening against the dollar is supporting exports, a Moscow-based trader said.

The trader estimated Russia’s July wheat exports at up to 2 million tonnes compared with 1.4 million tonnes expected both by SovEcon and Rusagrotrans.

Russia exported 835,700 tonnes of wheat from July 1-20, the agriculture ministry said. The pace of exports is up 19 percent from the same period a year ago.

Export prospects have also been underpinned by signals from the government, indicating it will consider making its floating wheat export tax more predictable for exporters.

The tax is currently set at the minimum level of 10 roubles per tonne but will rise if the rouble falls sharply against the dollar.

“We will be discussing this at a separate meeting,” Deputy Prime Minister Arkady Dvorkovich, who is in charge of agriculture, told reporters on Tuesday when asked how the tax can be made more predictable.

“The agriculture ministry should make a proposal,” he added.

Source: Reuters | #grain | Comments: 0 Views: 59

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