Russia is back on the world grain market

The Russian government plans to hold talks with the countries that have traditionally imported Russian grain in order to lay out Moscow's long-term position on the global grain market, First Deputy Prime Minister Viktor Zubkov said.

"The government will hold additional talks with certain countries to explain that we are returning [to the market following Russia's 10-month grain export ban] for years and years to come," Zubkov told reporters on the sidelines of the Russian Agrarian Movement convention in Rostov.

Russia will cancel the grain export ban on July 1.

With the cancellation of the ban, Russia is ready to revisit the idea of forming a Black Sea grain pool together with Ukraine and Kazakhstan.

"If we receive such proposals from our colleagues, from Ukraine and Kazakhstan, we will definitely look at them," he said.

Meanwhile, Russia might introduce export duties on grain only if the price increases to 6,500 rubles per tonne of class 3 or 4 wheat, Zubkov told journalists on the fringes of the fifth congress of the Russian Agrarian Movement, where he was unanimously elected as chairman.

"So far, there's no need to set up an export duty," Zubkov said.

When asked under what conditions a restrictive measure might be employed, Zubkov said; "We've already discussed this, there's no big secret. It's possible, if the price suddenly goes to 6,500 rubles per tonne of Class 3 or 4 wheat," he said. Zubkov added that the grain price now is fair enough below this at around 1,000 rubles.

"What would we do this [introduce an export duty]?" Zubkov said.

Source: Interfax Selskoe khozyaystvo i prodovolstvie, no. 25, 29.06.2011

Two million hectare more grain cropland than year before

The drilling season has been completed in Russia. The grain harvest this year is expected to total 85 million t if the weather is good, announced the Russian Federation’s Ministry of Agriculture Elena Skrynnik at a meeting of the Presidium on 9 June.

According to the statement by Viktor Zubkov at the 5th session of the Russian Agrarian Movement in Rostov-on-Don on 23 June, some 49 million hectares have been cultivated. That is 2 million hectares more than in the previous year. “This allows us to expect a good harvest and plan to export 15 million t”, he forecast.

Mr Zubkov announced that the financial support for agribusiness will remain a fundamental position of the government. He reminded listeners that in the last five years only 0.5 billion rubles from the federal budget had been spent on promoting agriculture. The regional budgets had added a further 250 billion rubles. “These are considerable sums”, he emphasized.

Source: Interfax Selskoe khozyaystvo i prodovolstvie, No. 23 of22.06.2011 and No. 25 of 29.06.2011

Export duties on grain waived

Russia does not currently see any specific reason for levying customs duties on grain exports, announced First Deputy Minister President Viktor Subkov at the International Economic Forum in St. Petersburg (16 to 18 June 2011). The Director General of the International Grain Company, Juriy Ognev, had called upon Subkov during an agri-political conference at the Forum to issue a binding declaration that there would be no restrictions on exports of Russian grain in the foreseeable future. Otherwise, key import countries would simply delete Russia from their list when putting out tenders. Central Bank Head Ignatjev pleaded for flexible export duties that are supported by the Ministry of Economics too. The National Association of Grain Producers is against all export duties, however. They say that the new trade restrictions would jeopardize Russia’s position as important supplier of grain on the world market.

 Subkov stressed that Russia has good grain harvesting prospects this year and that is why the country should be able to cover demand from traditional buyers. Furthermore, Russia would like to strengthen its role as food supplier for a growing world population. The waiver of export duties on grain should help to stabilize the domestic food market and check inflation. There has recently been growing discussion in Russia about creating a national stabilizing fund for possible interventions in agricultural markets. According to Subkov, this step should be reviewed without any haste. As the Moscow Consulting and Research Centre for Agribusiness (Sovecon) stated, Russian grain exporters again have more chances of success in a tender announced by the Jordanian Ministry of Trade and Industry for the beginning of July.

Source: Interfax Selskoe khozyaystvo i prodovolstvie, No. 24 of 22.6.2011, Agra-Europe of 27.06.2011

No “explosive” increase in grain exports in sight

“Almost record-breaking grain deliveries from Russia are not to be expected after the grain embargo”, believes Igor Pavenksiy, Head of the Department for Market Analysis, ZAO “Rusagrotrans“.

“There will be no ‘explosive’ increase in exports. The scope of deliveries is estimated at 1.5 to 1.7 million t, although it was initially suspected that exports would account for 2 million t”, explained Pavenskiy, talking to Interfax on 24.06.11.

He added that grain export forecasts would be lower in July than in 2010, the preceding year, when 1.94 million t were exported. In July 2009 exports totalled 1.34 million t, and in July 2008 they were 0.81 million t. According to Pavenskiy, the reduction in forecast figures was due to price reductions on the world market. Another reason was that Russian grain has been deleted from the lists of importing countries. For instance Egypt recently excluded Russia from its list of grain suppliers up to August 2011 until the situation with the grain harvest is clarified.

According to the information supplied by Rosstat, grain stocks up to 01.06.11 including intervention grain amount to 19.08 million t, compared with 23.9 million t at the same time in 2010.

Source: Interfax Selskoe khozyaystvo i prodovolstvie, No. 25 vom 29.6.2011