Russian grain exports on upward trend despite weather

Outlook

Agriculture Minister Dmitry Patrushev has said grain exports for the year to July will reach a record 52 million tonnes, based on a 2017-18 harvest of 135 million tonnes. The coming agricultural year looks less promising: poor weather conditions have prompted ministry officials to lower 2018-19 harvest estimates to 105-110 million tonnes, although Patrushev says surplus grain reserves should sustain export levels.

Russian exporters are actively developing newer markets, among them China, to which grain exports (including soybean as well as cereal grains) last year reached 1.23 million tonnes, more than double the 503,000 tonnes sold in the 2016-17 season.

Impacts

• Russian exporters will be encouraged by world wheat prices rallying above 200 dollars per tonne, reflecting lower global output forecasts.
• Lower prices earlier this year prompted farmers to save on fertiliser and other chemicals, placing the 2018 crop at greater risk.
• Exports to Venezuela, Mexico and Laos are part of efforts to expand markets in Latin America and Asia.
• Selling grain from stockpiles will ease Russia’s storage capacity problem.