The Ministry of Agriculture has raised the forecast for grain exports during the 2018 – 2019 season to 42 million tonnes. According to Deputy Minister of Agriculture Oksana Lut at a meeting with major exporters on Friday, corrections were made to the forecast on the basis of preliminary data from Rosstat and current balances provided by regional authorities, according to which this year’s grain harvest has totalled to 112,8 million tonnes. The export forecast for wheat also increased to 37 million tonnes.
On December 3rd, at a meeting with the President, Minister of Agriculture Dmitry Patrushev assessed export at 39 million tonnes, including 34 million tonnes of wheat. As noted at the meeting, grain shipments have already reached 26,8 million tonnes – a 4% increase over the same period of the past year. Including wheat, shipments increased by 12% to 22,6 million tonnes.
Despite the increase, questions on limiting grain exports were not raised at the meeting, Interfax reported on behalf of a source familiar with the discussion. According to the source, emphasis was placed on a general sense of calm in the markets, and that there was no need for active measures to influence the markets. “We agreed that the Ministry and exporters will continue to monitor the situation” he said.
According to totals from the first half of the agricultural year, grain exports were forecast at 28 million tonnes; in the second half of the year, about 14 million tonnes of shipments were expected. At these volumes of exports the Russian market is fully provided with grain and sufficient stored supply to maintain market stability, the Ministry stressed.
The “Rusagrotrans” analytics center estimates grain exports at 43,7 million tonnes, including grain legumes and exports to EEU countries, including approximately 35,9 million tonnes of wheat. “We are waiting for data from Rosstat on the total gross harvest of individual grain crops, after which the forecast can be adjusted” said Igor Pavlensky, head of Rusagrotrans to Agroinvestor. Analytics center “SovEcon” earlier in December forecast exports of grain by season totals at 43,2 million tonnes, including 34,7 million tonnes of wheat. In December, the United States Department of Agriculture raised its forecasts on grain from Russia by 1,5 million tonnes to 36,5 million tonnes.
Harvest data published by Rosstat provides a basis to raise Russia’s grain export potential, noted Vladimir Petrenko, the General Director of the ProZerno analytics firm. In his opinion, increases in exports of barley and corn are possible at levels of 3,6 and 2,4 million tonnes respectively. Petrenko now assesses the country’s grain export potential at 36 million tonnes.
Following publication of the new forecasts by the Ministry of Agriculture, market prices on wheat began to decline. “Approaching the meeting, there were certain speculations upon which prices for Russian 12.5% protein wheat reached $242 per tonne and even higher. But in the end those fears were not confirmed” Pavlensky noted. According to data from SovEcon, over the last week, prices on grain grew by $5 to $234 tonnes, repeating a maximum level in the current season registered in August. One factor in that price growth, as analysts highlighted, was a general sense of concern around the meeting of traders with representatives of the Ministry of Agriculture.
In previous meetings, the Ministry noted repeatedly that there are no plans to raise restrictions on grain exports. Nevertheless, a level of concern remains among market participants that the government may suddenly limit movements. According to the website of the Ministry of Agriculture, the next meeting with exporters is scheduled to be held in February 2019.