The largest traders of the Russian grain market announced the establishing of a new union of grain exporters. According to the press-release Eduard Zernin, Deputy General Director of United Grain Company, will become the CEO of the union.
Four companies – Aston, Glenkor Agro MZK, OZK-Yug, Trade House RIF – signed the memorandum on the establishment of the union. The companies export more than third of grain from Russia. Aston, Glenkor Agro MZK, OZK-Yug and Trade House RIF will be among the co-founders of the union. According to the analytical centre of Rusagrotrans, by the results of the season 2017/18 RIF became the largest grain exporter with the share of 13.6% (7.2 m tonnes), Glenkor took the second position (10.1%, 5.3 m tonnes), third – Aston (6.9%, 3.6 m tonnes). OZK took the 11th place with the output of 1.4 m tonnes.
Key objective of the union is to “promote Russian grain and beans as well as products of their processing to the international markets”. “Union establishing will add to better cooperation between grain exporters and authorities”. In particular, the new unit is about to take part in the law making, implement foreign practices of grain quality provision and assessment, assist in development of special laboratories and expert institutions. Besides, the participants are planning to imbed digital technologies and automation, which will enable to “improve collaboration with agriculture producers” and “set the control of grain harvest and quality”, remarked Marina Turyanskaya, Director of RIF.
Mr Zernin claimed, “The work of the union will allow to strengthen the competitiveness of the Russian grain at the international markets. We are planning close cooperation with the state authorities and entering new distribution markets to increase export of Russian grain and beans”.
The union establishment was initiated by the Ministry of Agriculture. The Head of the Ministry, Dmitry Patrushev conducted the meeting with the leading exporters in February of 2019. At the meeting he claimed, “It is necessary to form a strong union to represent major exporters. We need to understand common trends and demands of the market”. As informed earlier, the union can be established in April.
Aston and Glenkor were among the founders of the National Association of Agriculture Exporters, established in 2011. Mr Balan, the President of the Association, informed that the Association would consider its further work. “There will be a meeting to discuss the current state of affairs”, said Mr Balan. According to him, to date Aston and Glenkor are the members of the Association. Mr Balan considers that there is no need in establishing a new union. “The association has existed for eight years, it is respected and recognised. Although, in its present status of an independent organisation it is not suitable for the Ministry of Agriculture. They need controlled and predictable non-governmental organization, where any Ministry’s initiatives will be approved. To my mind this is nonsense”, said Mr Balan. Aston and Glenkor refused to comment.
Andrey Sizov, Expert of the Analytical Centre SovEkon, supposes, that exporters, probably, got the necessity to establish more effective cooperation with the state. “That does not reduce the amount of problems for the grain business, for both export and production”, said Sizov. According to him, the uncertainty about the governmental actions has been growing recently. “Since the season 2017/18 state interference in the market has constantly been increasing, there have been constant attempts to regulate the export, though it is the major driver of crop farming and grain production growth. The question of the export limiting was being discussed for the whole season, though the yield is the third throughout the history”, noticed Mr Sizov. Besides, he reminded about the export fee, which was introduced in 2015, though it is zeroed out at present. Mr Sizov told, “Recently there have been claims about the quality of exported grain, setting the control system etc. Such announcements are alarming: as I believe, it is necessary to speak about the release of control and reduction of expenditures for the market players. It should be among the top priorities of the new organisation”.