IKAR in Mass Media

Russia wheat exports may fall below 32 mln T as coronavirus hits prices - IKAR

07 февраля 2020 года

MOSCOW, Feb 7 (Reuters) - Russia, the world's top wheat exporter, may ship less than 32 million tonnes abroad this season as factors such as the China coronavirus outbreak make domestic sales a better option for farmers, the IKAR consultancy said on Friday.

The outbreak of the new coronavirus, which has killed more than 600 people, has led to uncertainty over demand and growth prospects in global markets, pressuring soft commodity prices.

Beijing has started to diversify supplies of agricultural goods as a result of the trade war with the United States increasing imports of soft commodities, including wheat, from Russia and other producers.

However, since the virus outbreak, Russia has restricted passenger vehicle crossings to and from China, suspended direct trains and limited a number of airlines flying there, but so far has not touched cargo shipments.

"We are facing difficult situation related to coronavirus," Dmitry Rylko, head of Russia's IKAR consultancy, told a Moscow conference. "It has seriously dampened global prices."

Rylko said Russian wheat prices had started to "drastically fall" over the last couple of weeks, reaching $200-201 per tonne for the new crop with delivery in August.

He added that margins in the domestic market were currently better than for exports, so traders were offering less wheat abroad, and predicting that total wheat exports in the current season may come below 32 million tonnes.

A Russian trader, who deals with grains from Siberia, told Reuters that some sellers were holding back shipments to China, fearing that its borders with Russia could be shut at some point due to the coronavirus.

"No-one wants to take on risks related to shipments: you send a cargo, then borders are closed and cargo gets stuck there. There are no guarantees (that this won't happen)," the trader said.

Yulia Korolyova, head of quality assessment department at Rosselkhoznadzor, Russia's agriculture watchdog, told Reuters that Russia was continuing to export grain to China without restrictions.

Rylko said later that IKAR's official Russian wheat export forecast was lowered to 32.9 million tonnes for 2019/20 season from 33.5 million tonnes he expected before. Russia shipped 22.1 million tonnes of wheat between July 1 and Jan. 30.

In the 2018/2019 season, Russia exported 35.2 million tonnes of wheat, with the Middle East and North Africa its main buyers.

Source: Reuters | #grain #WhereTheMarginIs | Comments: 0 Views: 33

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