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About the country-samokalako, 05.09.17

Drought from competitor countries and the increasing consumption of wheat in China, India and other Asian countries to help farmers from Russia to extend grain exports to Asia. In America, the situation is expected to have the lowest harvest in a decade and a half, even without considering the effects of the hurricane “Harvey”, Australia and Canada are also not in the best shape.

A good place for business combination of circumstances: droughts in Australia, Canada and the United States and the growing demand for grains in fast-growing economies helps to promote wheat from Russia to Asia, which accounts for about a third of world consumption of wheat. The demand for grain there for the last decade has almost doubled. Russia is now actively penetrating the grain markets of China, Indonesia and Japan and other Asian countries.

Not to say that they used to be for Russian farmers are closed, but there they waited for the sharp competition from Australia, Canada and the United States. This year, however, in the above-listed countries was unfavorable for agriculture weather conditions, mainly drought. This year is expected to record over ten years of decline in grain production in Australia. In America the situation with wheat is even worse. There’s going to be the lowest harvest in a decade and a half. And that’s without taking into account the effects of the hurricane “Harvey”. In Canada, the decline in yields of grain recorded for the fourth consecutive year.

“All the benefits will go to Russia,- quotes Bloomberg an explanation of Bejamin of Bogart, Director of the British consulting company CRM Agri-Commodities.- In Russia, this year’s expected record harvest. They need new markets for additional wheat…”.

Circumstances do develop very successfully for the Russian farmers and exporters. According to the Ministry of agriculture, U.S. (USDA), this year Russia will grow by a record of 77.5 million tons of wheat (although the food and agriculture organization of the UN — FAO gives a more cautious forecast). In any case, the excess over domestic demand is expected to be significant.

The fight for the title of the main exporter of wheat is between the USA and Russia. America has for many years sold more than all other countries, but in the 2015-16 season lost to Russia. Last year she gave the title of chief of the exporter, but in 2017 it will lose again. USDA economists believe that the export of Russian wheat this season, which began July 1, will increase compared to the previous 13% to reach 31.5 million tonnes. In comparison with the season of 2012-13 is almost double the rise.

The Russian wheat exports to Asia have lagged behind exports to other regions, partly because of the large distances to be overcome by the wheat grown in the North Caucasus. Grain ships out of the Black in the Mediterranean sea, then proceed through the Suez canal into the Indian ocean and around India finally fall, for example, in Indonesia, almost double the import of wheat for 10 years and have now become the second importer of wheat in the world after Egypt. Partly due to lack of suitable grain quality.

The most rapidly growing consumption of wheat in South-East Asia, which now competes with traditional importers: Middle East and North Africa. Rabobank economists forecast that the demand for wheat in Southeast Asia to 2020 will grow by approximately a third.

In the season 2016-17. supplies of Russian grain to countries in southern, Eastern and South-Eastern Asia increased by 60% and came very close, according to the UkrAgroConsult, to 3 million tons. Despite such rapid growth, Russian grain occupies only near 5% in the total import of grain by region. Suffice it to say that in recent years, almost all imports of wheat in Japan had on the United States, Canada and Australia. Of the 10 million tons of wheat, bought by Indonesia in the last season, almost three quarters also occurred in the USA, Canada and Australia. China buys about a third of the wheat in America.

Analysts at the Institute for agricultural market studies (IKAR) think that Russia may significantly increase exports of wheat to Asia this year due to Indonesia, Vietnam and Philippines. In UkrAgroConsult believe that the import of wheat this year will also increase Japan, Malaysia and China.

At the same time, according to forecasts, exports of U.S. wheat will decrease by 7.6%. Canada perjorative wheat exports to the United States, which because of the poor harvest themselves will have to sharply increase imports. Serious problems for farmers Australia, the largest wheat exporter in the Asia’s largest grain producer in the southern hemisphere. USDA expects that exports of Australian wheat this season due to adverse weather conditions will decrease by about 20%!

Russia has already begun to increase the supply of wheat abroad. For example, the supply of wheat to Indonesia in the first quarter exceeded 330 thousand tons.

Growth of export of Russian grain to Asia will contribute to the expansion of the technical capabilities of Asian millers, believes That Basnett, senior Manager, Australian consulting company Market Check.

“Technology grinding was probably the main obstacle in the way of Russian grain to Asia – he said.- Now, however, the ability of millers in Asia have grown, enabling them to grind and Russian wheat.”

In fairness I must say that in Russia traditionally do little good grains, wheat 1 and 2 classes, which is good-and the need to make bread. The rest worse, and then forage. But in the post-Soviet period Gosty liberalized, and now when baking add the grain the worst class, and even on the contrary — only good add, baking of the 3rd. Further in the case are the improvers. But overall it’s the topic of another article.

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