Photo: jasmine8559 via flickr
In case you’ve been missing the action this summer: the Russian wheat harvest is proving to be so abundant, Moscow experts and grain traders are forecasting that exports will reach up to 23.5 million tonnes in the trading season which runs until June 30, next year.Alexander Korbut, spokesman for the Russian Grain Union, representing the exporters, said the target of 23.5 million tonnes is “realistic, because Russia has plenty of grain, and it is absolutely necessary to export this volume to empty the storages. The market environment is also favourable.”
For the time being, as the US Department of Agriculture peers down from its satellites, the Russian trade volume for the season is still estimated in Washington at 10.5 million tonnes. Not even critics of the Russian Grain Union think that’s in the ballpark.
Oleg Sukhanov of the Institute for Agricultural Market Studies in Moscow told Fairplay “[the Grain Union’s target] is a super optimistic estimate, which does not take into account competition from Ukraine and Kazakhstan on the world market, as well as domestic infrastructure problems. Our realistic estimate is 20 to 21 million tonnes.”
Even at that level, Russian trade sources believe it will be possible to match Canada for global shipment volume, and possibly beat Australia. The latest August projections from the Canadian Wheat Board indicate a wheat harvest of 21.3 million tonnes, with an export volume of roughly 10% more than last season’s volume; that came to 11.2 million tonnes, so the new Canadian target is between 12 and 13 million tonnes.
The Australian Wheat Board said a few days ago that its volume of exports for the season just concluded came in well above previous estimates at almost 19 million tonnes. No prediction for the new trading season is available, except that the overall harvest is expected to come in about 3 million tonnes below last season. .
That leaves the US leading the international wheat export table, but the USDA reports are already reflecting reductions in earlier estimates to below the 30-million tonne mark.
Russian traders acknowledge that the year-long ban on exports, which was lifted on July 1, undermined the financial viability of some Russian companies, and a dramatic change in market shares among the leading traders is now under way. According to Korbut, “market shares are unpredictable right now. There are a lot of interesting developments ahead.”
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