Russia has vowed to regain its place among the world’s top grain producers and exporters.
However, it might take awhile.
The Russian crop was devastated this year by drought and heat, and a ban was imposed on grain exports between Aug. 15 and Dec. 31.
However, a leading Russian market analyst said that’s just a minor setback in the country’s ambitious plans to increase production and exports over the next five to 15 years.
“A temporary suspension of Russian exports does not mean a complete loss of those markets,” said SovEcon chief executive officer Andrei Sizov.
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“Russian grain will again be in demand on those markets, as it is cheap and competitive and its quality is actually rather good.”
Sizov’s comments were reported in the on-line publicationMoscow Times.
However, Dmitry Rylko, director of Russia’s Institute for Agricultural Market Studies, told the same publication that it won’t be an easy chore.
“First of all, we must restore an exportable surplus, which does not appear to be easy under current circumstances,” he said.
“When we restore the surplus, which will definitely take place sooner or later, we will gradually reestablish our relations with all the key buyers.”
Russia’s wheat crop this year is expected to be 41 million tonnes, down from 62 million last year and more than 100 million in 2008.
Winter grain planting is expected to decline by about half this fall from last year.
Russia is also expected to be a wheat buyer for the first time in years, with import estimates ranging from 1.5 to six million tonnes.
The huge crop in 2008 prompted
the government to announce plans to increase production by 50 percent in the next 15 years and double exports to 40 to 50 million tonnes.
The plans were driven by state grain trader United Grain Company, which set a target of shipping 16 million tonnes by 2015 from an exportable surplus of 40 million tonnes.
Achieving those targets, including new transportation and grain handling infrastructure, was expected to cost $4 billion US.
Meanwhile, the Canadian Wheat Board issued a special commentary on feed barley markets.
Exports from Russia and other Black Sea producers, including Ukraine, have accounted for 60 percent of the 16 million tonnes of feed barley sold annually.
The same drought conditions that wreaked havoc on wheat did the same to barley, with a dramatic decline in exports expected from the region.
The board said it has sold more than 200,000 tonnes of feed barley in recent weeks and urged farmers to look at pricing opportunities for feed barley under Guaranteed Delivery Contracts.
As of last week, the price available under the GDC (basis Vancouver) was $215 a tonne, but recent volatility in the market has led to prices well above that.
“Prices offered to farmers under GDCs have been continually increasing as new tenders have been awarded,” the board said.
Farm groups have recently criticized the CWB’s barley programs for “keeping a lid” on returns to barley growers.
“Global feed barley prices have skyrocketed in recent weeks, but these higher prices are not reflected in the Prairies,” said Brian Otto, president of the Western Barley Growers Association.
He also criticized the board for failing to publicize the GDCs earlier in the summer when market watchers first became aware of the potential for higher prices.
