MOSCOW, RUSSIA — Russia’s wheat production forecast for 2019-20 has been revised downward by 5 million tonnes, according to a Nov. 7 Global Agricultural Information Network report from the U.S. Department of Agriculture (USDA).
The USDA said it lowered its projection to 74 million tonnes based on official and unofficial data from the Russian government and industry experts following initial results of the 2019 harvest.
“Dryness in some areas versus too much rain in others have reduced expected yield,” the USDA said.
Meanwhile, the quality of the 2019-20 wheat crop will exceed last year’s crop and the long-term trend is “steadily increasing quality,” the USDA said.
“According to the Ministry of Agriculture, the share of food grade wheat has increased to 84% against 74% in 2018,” the USDA said.
Wheat exports are forecast at 34 million tonnes, down from 35.7 million tonnes in 2018-19 and 41.4 million tonnes in 2017-18, according to the USDA.
“This season, challenges for Russia in wheat export markets come primarily from Ukraine and the E.U., who have larger crops as well as exports,” the USDA said. “Further, strong U.S. wheat exports instead of the anticipated decrease changes the market dynamics.
“Factors such as a stronger Russian ruble, significant administrative burdens and extremely high logistics costs within Russia — internal transportation costs for Russian grains are higher than for U.S. and Australian exporters — also constrain export competitiveness.”
It noted that the recent opening of the Saudi Arabia market for Russian wheat could modestly expand Russia’s already large market share in the Middle East and North Africa.