Russia to harvest record grain crop

by Eric Schroeder
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Russia
 
WASHINGTON, D.C., U.S. — Russia is on track to harvest its largest grain crop, with forecasts calling for total grain output of more than 128 million tonnes, according to an Oct. 27 Global Agricultural Information Network (GAIN) report from the Foreign Agricultural Service of the U.S. Department of Agriculture (USDA). If realized, the crop would exceed the record of 127 million tonnes set in 1978, the USDA said.

“Russian farmers used half the acreage as in 1978 and got double the yields,” the USDA said. “The new record crop resulted from a combination of improved production technology and favorable weather this year such as minimal winter kill and good growing conditions during summer in all grain producing areas.”

According to the USDA, average wheat and barley yields in Russia for the 2017-18 marketing year are forecast 16% to 19% higher, respectively, than in 2016-17.

As a result of the record grain crop, the USDA said estimates for exports have been raised. Wheat exports in 2017-18 are forecast at 33.5 million tonnes, up 20% from 27.804 million tonnes in 2016-17, while barley exports for 2017-18 are forecast at 5.7 million tonnes, up 61% from 3.55 million tonnes in 2016-17, the USDA said.

US winter wheat harvest
 
Egypt, Turkey and Bangladesh were the three largest export markets for Russian grain in 2016-17. The USDA said Turkey remains the No. 2 destination for grain in 2017-18, despite additional import requirements that were placed on Russian wheat, sunflower oil, dry peas and corn on Oct. 9. The new rules require Russian exporters to obtain a stamp and certify invoices with the Turkish Trade Mission in Russia prior to shipment, the USDA said. Despite the requirement, the USDA noted in the report that industry analysts don’t expect the additional hurdle to affect total grain shipments to Turkey.

Historically, Russian grain exports have been limited by such factors as icy conditions on the Azov Sea, loading restrictions at Black Sea terminals and trade obstacles at the biggest destination countries. So, to accommodate the growing export market, the USDA said Russia is taking steps on the transportation front to make movement of grains easier.

“The Government of the Russian Federation announced plans to put in place rail transport subsidies intended to facilitate the movement of grain from Siberia, the Urals and the Volga Valley thus supporting grain prices in the most remote grain producing federal districts and increasing export shipments,” the USDA noted in the report. “Separately, the state-run Russian Railways (the RZD) introduced a 10% rail discount for transportation of grains from Voronezh, Orel, Tambov, Orenburg, Saratov, Novosibirsk and Omsk oblast through June 30, 2018. Market participants anticipate these measures may have very limited effect on Russian grain exports in 2017-2018.”
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