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Russia may double wheat imports due to drought -analysts

18 сентября 2012 года

MOSCOW, Sept 18 (Reuters) - Major wheat exporter Russia may this year double its usually small imports of grain from neighbouring Kazakhstan and Ukraine to cover shortfalls due to drought in some regions and ensure minimum inventories, analysts and industry sources said.

"During years of good harvests, Russia's wheat import volumes are not significant and cannot have a substantial effect on its (domestic supply-demand) balance," SovEcon agriculture analysts said.

"This year the situation is completely different and grain imports may become an important factor for the stability of the grain balance," they said on Sovecon's website.

In good harvest years, such as 2011/12, Russia imports about 1 million tonnes of grains a year, mainly wheat from Kazakhstan to its border regions in the Urals and Siberia, as well as some top quality milling wheat that Russia cannot supply.

Forecasts for this year do not indicate that the country as a whole will face an outright deficit.

Russia is expected to produce around 70 million-75 million tonnes of grain this year and to consume around 70 million tonnes.

If its exports reach 10 million-12 million tonnes as expected, carryover stocks that now total 15 million tonnes are likely to drop to between 5 million and 8 million tonnes.

While Russia will be able to meet most of its domestic demand, several regions, like the North-West and Far East, face local deficits that may be covered by imports, according to the Institute for Agriculture Market Studies (IKAR).

Kazakhstan will be the main source of imported milling wheat for Russia this year, while Ukraine could export feed grains to Russia, mostly maize (corn), SovEcon said.

"Europe could also ship to Russia's North-West regions but at this moment this is only in theory," Andrei Sizov Jr., managing director at the SovEcon, told Reuters, adding there were no signs of such shipments so far.

According to SovEcon estimate, Russia's wheat imports rose significantly to at least 100,000 tonnes in July-August, from several thousands of tonnes during the same period last year.

SovEcon expects Russia to import 1.5 million tonnes of grain, including flour, this year, while the Institute for Agriculture Market Studies (IKAR) expects the country to import 2.5 million tonnes of grain, of which wheat could account for up to 1.9 million tonnes.

The head of the influential Russian Grain Union expects grain imports to be from 1.5 million to 2 million tonnes.

"This year imports will depend on prices in Russia and Kazakhstan. Kazakhstan has large carryover stocks and a significant export surplus, despite a falling harvest," Arkady Zlochevsky, head of the producers' lobby group, told a grain conference in Moscow this week.

The carryover stocks, from last year's post-Soviet record crop of 27 million tonnes, should allow Kazakhstan to remain a major wheat exporter in the current marketing year. It may be able to export more than 10 million tonnes of grains this year.

Yevgeny Aman, executive secretary at the Kazakh Agriculture Ministry, said current high prices for Kazakh wheat might be an obstacle to Russian buyers acquiring large volumes in the near future. He said Kazakh wheat was selling in the domestic market at more than 40,000 tenge ($267.20) per tonne, and prices were certain to rise.

But he said Russian regions lying close to Kazakhstan, for example Chelyabinsk and Sverdlovsk, might increase purchases of Kazakh wheat to make up for a domestic shortfall.

"There, they might have a deficit," Aman told Reuters. "It might become more economical to buy from Kostanai region (in Kazakhstan) than to bring grain from Krasnodar (in Russia). The market will determine this."

Russia's average domestic EXW (ex-silo) prices for third-grade milling wheat were at 8,450 roubles ($280) per tonne last week, according to SovEcon.

MAIZE FROM UKRAINE

Ukraine is expected to export maize to Russia, traders said, adding that they do not see signs of a massive demand increase.

"There could be some export of maize (to Russia) this season, but in small volumes and to regions that are close to Ukrainian border. I do not think we will see exports of wheat," one trader in Kiev said.

Another added: "The situation in Russia is not so serious as to import Ukrainian wheat at our huge prices."

"As for maize - it's possible in future, but I do not think they are ready to buy anything right now."

Ukraine's exportable surplus of maize may decrease to 12 million-13 million tonnes this year from last year's 14.4 million tonnes, analysts and traders said. It has already exported 1.25 million tonnes of maize so far the 2012/13 season.

In the 2011/12 season Ukraine exported only 3,702 tonnes of maize to Russia, while its exports of barley and wheat were negligible.

($1 = 30.5862 Russian roubles)

Source: Reuters  |  #grain   |  Comments: 0   Views: 49

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