MOSCOW, Aug 24 (Reuters) – The huge harvest that Russian farmers are currently gathering has caused SovEcon agriculture consultancy to raise its forecast for Russia’s 2017-18 grain and wheat exports by 400,000 tonnes to 44 million tonnes and 32.4 million tonnes, respectively.
Russia, shaping up to be the world’s largest wheat exporter in the 2017-18 marketing year that started on July 1, is widely expected to harvest a grain crop this year that beats last year’s record.
SovEcon, one of the leading agriculture consultancies in Moscow, raised its forecast for the 2017 grain crop to 127.6 million tonnes from 125.2 million.
The consultancy upgraded its forecast for Russia’s wheat crop by a million tonnes to 78.9 million.
“The export forecast was raised both for grain and wheat by a more modest 400,000 tonnes due to possible infrastructure constraints,” Andrey Sizov, managing director at SovEcon, told a conference in Moscow.
The arrival of a record grain crop is expected severely to test Russia’s crop storage and transport infrastructure, pitting its supply against competiors for the entire 2017-18 marketing year.
Infrastructure constraints across the supply chain from storage and delivery to ports are likely to become more visible in the coming months, SovEcon said this week.
As of Aug. 24, Russian farmers had harvested 83 million tonnes of grain from 46 percent of the total area.
Among the risks for its crop and export estimates remain Russia’s wheat crop in the Asian part of the country and corn as the bulk of both has yet to be harvested.
The appetite of the Agriculture Ministry, which buys grain for state stocks on the domestic market, is also uncertain.
SovEcon said it expected the government to buy a million tonnes of grain for its stock and to raise it to five million tonnes this season. Further demand for government purchases will face financial constraints unless more funding comes from the state budget.
Tight financing – as Moscow tries to reduce a budget deficit caused by weaker oil prices – and the need to fund storage for existing stocks have limited government demand for the expansion of state grain stocks in recent years.
Overall market and state grain stocks are expected to rise to 28.9 million tonnes towards the end of the season on June 30, 2018, from 21.3 million at the same date in 2017, SovEcon added.