The grain fell on the background of reduction of fears for the harvest
Pessimistic predictions of low wheat harvest in Russia this year may not be justified. Started last week, cleaning of barley, which is judged by the level of wheat harvest, showed good pace. Against this background informed parastasie export prices for Russian wheat fell to $3.5 to $202,5 per ton, returning to the values of the end of may.
Last week, export prices for Russian wheat have declined from $3.5 to $202,5 per ton (FOB), reported "Sovekon". According to the General Director of "Prozerno" Vladimir Petrichenko, wheat from Russia is trading at $204-205 per ton. The General Director of Institute of a conjuncture of the agrarian markets (IKAR) Dmitry Rylko estimated average trading level of $203 per ton.
Prices for Russian wheat began to decline following the quotations at the world exchanges. According to estimates, "SovEcon", the July contract for wheat in Chicago fell by 3% to $185,2 per ton, which was at least a few weeks. On the stock exchange in Paris, the September contract is trading at $207,5 per ton, which is 1.8% less level a week ago. As a result, export prices for Russian wheat has returned to indicators of the end of may — about $203. However the starting price level for the Russian wheat before the start of the new season exceeds the indicator of June 2017 for about $25.
For operational customs data cited by Ministry of agriculture, since the beginning of the season, on 13 June, Russia exported about 50.5 million tons of grain — more than 47% compared to the same period last year. The supply of wheat grew by 49% to 39 million tonnes. "Sovekon" I do not exclude that by the end of the season total exports of grain from Russia will exceed 54 million tonnes.
The Director of "Sovekon" Andrey Sizov noted that the increase in export prices of wheat from Russia, observed from the end of may, was largely due to inflated fears of serious problems with the harvest in Russia and Ukraine. But last week, started cleaning grain, and it became clear that the most pessimistic assessment of the new crop, primarily in Russia, not confirmed, which is also reflected in the prices, he says. The new harvest of grain began with winter barley, and the degree of correlation in the yield with the yield of winter wheat high notes "Sovekon". So, on June 13, the yield of barley in the Krasnodar region ranges from 33 tons per 1 ha in the southern regions, up to 68 quintals per 1 ha in the North. Thus, writes "SovEcon", the average yield of barley at the start of the harvest reaches 57.8 per hundredweight from 1 hectare against 60.6 per hundredweight from 1 hectare a year earlier.
The first harvesting of the new grain crop may indicate a relatively good wheat crop, according to mister Petrichenko. But the harvesting of winter barley in the South began two weeks earlier than usual, and is one of the signs of the dry conditions, indicates mister Rylko. "Sovekon" estimates the grain harvest in Russia in 2018 at 119.6 million tons, including 73,1 million tons of wheat. The forecast of IKAR — 114 million tonnes 71.5 million tonnes, respectively. In 2017, according to estimates from Rosstat, Russia gathered a record 135.4 million tons of grain, including 85,8 million tons of wheat.
If further observations confirm the existing relatively good as a new grain crop in Russia, the export price of wheat in the coming weeks may be reduced to $200 per ton and below, predicts Andrei Sizov. According to Dmitry Rylko, the prospects of the wheat harvest in the Kuban region are seen very good in this region IKAR expects a yield close to the record of last year. But in General, he warns, the harvest in the South will be below last year in the Rostov, Volgograd oblasts and Stavropol Krai, the drought impact is much stronger.
As said Vladimir Petrichenko, the starting benchmark export prices for Russian wheat in the new season may be the last tender of the Egyptian state company GASC held on 12 June. Then, according to the "SovEcon", GASC bought 300 thousand tons of wheat from Russia with shipment 15-25 July at a price of $209,5–210 per tonne (FOB).
Departing the growing season was marked by a number of records in crop production. A record or close to it and lower prices for many crops. So, grain prices have fallen to levels from three years ago, the price of sugar beets was comparable with its cost, lost margin, even high-yield oilseeds. What was this agricultural year?
Ramil Nizametdinov, Director of the state farm "Alekseevsky" (Bashkiria)
Despite the decline in sales prices of agricultural products in season 2017/18, our farm feels confident in the market. Last year gross harvest of greenhouse vegetables in the economy amounted to 15.5 thousand tonnes, which is 9% higher than a year earlier. Due to the expansion of the production areas and improve yields, the profitability of this segment could be maintained at a high level.
Over the next three years we plan to implement two major investment projects: to upgrade the existing greenhouse area 2.5 hectares, setting system, assimilation lighting and build new greenhouses of 5 ha, also system with assimilation lighting. Of course, for their implementation to us very important support. In particular, we expect the allocation of soft loans with extended repayment period to 15 years, as well as to recover 20% of the amount of capital costs to build. In addition, we hope to continue subsidizing interest rates on investment loans.
With regard to grain production, the harvest last year increased by 42% to 27 thousand tons as the farm works on the closed cycle "from field to counter", all the products we sell only in processed form (flour, bakery products, mixed fodder). This increases the added value and increases the profitability of the business.
Vadim Lepler, General Director of agricultural enterprise "Elm" (Tula region)
Season-2017/18 developed for our company as satisfactory. Although, of course, could be better. The main disappointment — the low prices for the products. During the implementation of harvest 2016 summer 2017 prices were high and then declined sharply. Wheat of the fourth class cost about 6 thousand rubles per ton, barley — about the same. Per ton of sunflower gave about 15 thousand rubles., raps — about 19 thousand rubles (all prices are without VAT). In the past agricultural year all the agriculture cost 20-30% more.
If you calculate the economy of the enterprise, looms is not very rosy picture. Indeed, while product prices remain at low levels, fertilizer, fuel, seeds, spare parts and technology is steadily becoming more expensive. And the costs to the company of loans, leases and other items are not reduced. And the state support we receive (per hectare payments), helps to solve the issues.
Dmitry Rylko, the General Director of the Institute for agricultural market studies (IKAR)
2017/18 crop year was good, but not as good as the previous one. The profitability of the business this season fell on average by 15-20%. Especially it concerns the production of sugar beet. The price increase showed a very few crops, such as soybeans. The situation negatively affected the increased cost of seed, fuel, spare parts and other means of agricultural production. Part may affect the situation in the state. But while it remains at the same level. That is, the costs of the farmers are growing, and the amount of aid from the state — no.
But there is confidence that next season we will meet with higher prices on agriculture and, therefore, the year should be better. The grain harvest is forecasted lower than last year, and its price will grow. Already a decrease of grain production in the world, which will also support prices. Can help and the ruble, if it is lower against the dollar than in 2017/18-M.
Dmitry Chapaev, Executive Director of the company "Roskhlopok" (Astrakhan region)
The past season for our company was successful. The price of cotton fiber has increased following the global trends. A year ago cotton was worth $2 million/ton, now $2,3 thousand/t. the demand for cotton in Russia is very high, especially in the textile industry. The entire crop, we implemented domestic partners.
In the nearest plans of the significant increase of crops. Simultaneously, we will improve the yield and quality of fibre. However, state support yet do not get any. Without government assistance to develop new business is very difficult.
Eugene CDs, General Director of "Krasnodarzernoprodukt-Expo" (KZP-Expo)
For the grain exporting season was much better than the previous one (2016/17). In particular, our company increased the volumes of export of grain of agricultural crops by about 18-20%. Most traditionally exported wheat. In General, the expected profit we got, and happy.
Vitaliy Shamaev, CEO of analytical company "Agrospiker"
If we talk about the production of grain and oil agricultures, ending the agricultural year was not particularly good for domestic growers. Record harvests for a number of positions received, but no money. It was affected by low purchase prices (in Siberia they fell to 6 thousand rubles per ton) and a stronger ruble. Almost all season it worked against the arable land. The cost of grain in the world was at the lows of the 2009-10 season and began to strengthen only from the beginning of this year.
In addition, continued to increase railway tariffs for transportation of agricultural products. Yes, the Ministry of agriculture has introduced a measure of market support, as subsidising of rail transportation of grain for export from remote regions. More than 1 million tons thus managed to take out, but considerable support for local farmers, this decision still did not. The purchase price in far regions was disastrous.
The cold in Siberia and drought in the South will negatively affect the yield
The analytical center "Sovekon" has lowered the forecast of wheat harvest in Russia in 2018 with the 78.2 million tonnes to 77 million tonnes according to Reuters, the revision is associated with delayed sowing of spring agricultural crops in Siberia. The forecast of grain harvest as a whole is lowered with 126,2 million tonnes to 124,9 million tons
Delay sowing in the Siberian Federal district is connected with the continuing snowfall in the region. "It is possible that due to the regional situation in Siberia we will continue to lower the forecasts on grain crops", — said the Director of "Sovekon" Andrey Sizov at the meeting of the Grain club. At the same time, the situation with winter crops in the whole country "Sovekon" evaluates as normal. According to Rosstat, as of may 1 the death of winter crops in agricultural enterprises amounted to 14.3 thousand ha or 0.2% of their crops, while last year the figure was higher and reached 47 thousand ha or 0.7% of the total area.
According to the Ministry of agriculture in the Siberian Federal district spring grains sowing to 24 may lagged behind last year's pace doubled. Including in the Altai region due to rains and snowfall by this date the crops were sown only 708 thousand hectares of the planned this year to 3.3 million hectares. according to the Ministry of agriculture of the region, given the weather factor, agriculture is revising the structure of sown areas, increasing the wedge feed and rely on planting varieties of crops with a short vegetation period. Three time lag is observed in the Novosibirsk region, where cereal crop species occupied only 18% of the area of the plan, of which the main crop of the region — wheat is sown on 116 thousand hectares (12% of the plan). As said before, the press service of the regional government, because of the difficult weather conditions in the region can be introduced a state of emergency. Acting Minister of agriculture of the Novosibirsk region Evgeny Leshchenko noted that such a regime "would allow for a more flexible approach to the regulation of the amounts of acreage and avoid potential penalties caused by failure of targets".
The Institute for agricultural market studies (IKAR) also intends to revise the forecast downward. "It will be announced next week, I can only say that it will definitely decrease," said "the Agroinvestor" the head of the grain direction IKAR Oleg Sukhanov. According to him, the situation in the Siberian Federal district is not critical, and the pace of planting can still catch up. "But the yield will not be what we expected. Also have a problem with dry weather in the South: the independent districts in the Stavropol territory, Volgograd and Rostov regions, in the Crimea. That is, the revision in yields will affect many regions as located in Siberia and in the South and centre of the country," said Sukhanov.
Analytical company "Prozerno" previously predicted grain harvest in 118.2 million so next week the forecast will be revised, said "Agroinvestor" CEO Vladimir Petrichenko. However, what will it be, the expert chose not to report.
Earlier, the Ministry of agriculture of the Rostov region called tense situation with precipitation. "In April and may, significantly less rain fell than last year and lower than average annual rate, in the upper layer of moisture is not enough. Have affected spring crops, which, due to the lack of moisture did not germinate fully, and therefore, there are problems with these crops," — said TASS, the Minister of agriculture and food of Rostov region Konstantin Rafalowski. In Crimea, the preliminary damage caused to farmers by the spring drought, estimated at 1 billion rubles, according to the head of the Republic Sergey Aksenov, "burned" about 100 thousand hectares of grain from 439,3 thousand hectares of crops. Also, the risk of drought may occur in the Volga (in six districts of the Volgograd region), has celebrated the local agricultural Department. Due to the dry weather affected parts of the crops and in the Krasnodar region, the Governor of the region Veniamin Kondratiev may 24. At the same time, according to him, the whole harvest in the Kuban is not expected below last year. "Certainly, the drought for us, too, presents a problem. But not all parts of the drought: there are areas would not be affected. Therefore, due to the high yields in areas where drought is not, I think we compensate for those areas where the harvest will be lower," — said TASS Kondratiev.
In the whole country in may, the difference of temperature from the figure reaches about 8 °C, announced this week the Director of hydrometeorological centre Roman Vilfand in an interview to "Rossiyskaya Gazeta". In June it is expected the situation is similar, and, in General, meteorologists expect the summer will be quite hot, the temperature background will be significantly higher than last year.
To may 24 spring grain agriculture in the country planted on 19.9 million hectares of the planned for this year to 31 million hectares, including spring wheat sowing was performed on 53%, spring barley — 80%, corn by 79%, follows from the operational monitoring of the Ministry of agriculture. Earlier, representatives of agricultural Ministry said that in connection with difficult weather conditions the sowing campaign while we intend to maintain a conservative forecast for the crop this year is 110 million tonnes.
Last year grain harvest in Russia amounted to record 135.4 million tonnes, including almost 85,9 million tons of wheat. A leader in its production is traditionally the southern Federal district, where he received 25.9 million t In the CFA crop agriculture amounted to 18.6 million tons in the Volga region — 17.9 mln t, in Siberia, and 9.9 million tons In the North Caucasus wheat crop was 8.3 million tonnes, in the Urals — 4.4 mln tonnes, in the North-West to 417 thousand tons in the far East — 280 thousand tons.
At the St. Petersburg international economic forum — 2018 was held the presentation of investment development of the sea port of Ust-Luga in the Kingisepp district of the Leningrad region.
"Our port in 2017 exceeded the record volume of cargo – over 100 million tons. Nice to know that this is not the limit, the port will continue to grow and develop. New project construction of grain terminal – are highly relevant. Our country occupies the leading position in the export of grain, and we need to provide the relevant port facilities to ensure quality and timely delivery of important goods to the recipients," — said the Governor of Leningrad region Alexander Drozdenko.
The project envisages the creation of three new terminals for grain processing, food products as well as General and bulk cargo. The receiving ability of the new port facilities will be more than 1 100 cars per day, or 20-25 million tons of cargo per year.
In the construction of the terminal will be invested at least 10 billion rubles. The new facilities will serve up to 1 thousands of port workers.
of the Governor and government Leningrad region
In the sphere of grain exports from Russia – a success that is rare in recent times amid the usual trouble in other areas. Planned in the current agricultural year (until July 2018) export 52 million tons of grain will be 46.5% higher than in the previous year (€35.5 million)., the Ministry of agriculture. Wheat improvement is even more significant – up to 40 million tonnes from 27.1 million tonnes, that is, by 47.6%. In this culture we are already ahead of USA that sell to export about 26 million tonnes, Although the total grain exports lag behind States with rate of about 80 million tonnes, but their exports of corn prevails. In wheat, Russia holds 22% of the world market, the EU -14%, 13%.
Success is associated with a record harvest of grain, amounting to 134,1 million tonnes by the end of 2017, and considerable reserves of approximately $ 32 million tonnes, 16% more than a year ago.
It is worth noting that this situation is combined with restrictions on harvest due to climatic conditions in the United States, Australia, and France. Therefore, a large physical volume of export from Russia is a happy combination of the rise in world wheat prices. Thus, the export price in mid-April 2018 was $ 208 dollars per ton of wheat, and by the end of April to $ 214, according to the Institute for agricultural market studies (IKAR). Thus, if the rough calculation take the price of 200 dollars, the revenue from wheat exports could reach 8-10 billion dollars per year. Furthermore, it should be borne in mind that the dollar / ruble exchange rate rose from 56 to 58 RUB past fall and winter to above 60 rubles in April-may 2018. This further increases the export revenue from the sale of grain.
By the end of 2018 is expected to harvest 110-115 million tons of grain, which is about 14% lower than the record 2017, Carryover stocks will probably also be less, because the current volume will go for export, which is beneficial in such a foreign environment. Therefore, the export potential of the next crop year while it is difficult to determine.
But there are certain nuances and the reality of today's grain market. The increase in exports and high export prices are creating upward pressure on the domestic procurement prices. The paradox is that at extremely high crop prices in the country are not reduced, and more increased, according to IKAR. However, to worry about the retail prices for bread is not necessary. It is socially significant products, the pricing of which is tightly controlled by antitrust and other services. Therefore, price increases above the General inflation level of 2.5-3% will not.
Institute of problems of natural monopolies research (IPEM) has estimated how much the train operators have to spend on a new grain to implement the President's task to increase exports to $45 billion by 2024 we are Talking about 79-86 billion rubles, which will have to invest in the production of grain, and to spend on the services of leasing companies. About it writes "Kommersant" with reference to the calculations of experts.
In 2017 the proportion of grain in the AgroExport was about 36%, or $7.4 billion of the $20.5 billion Experts predict that by 2024 it could go down to 25-30%, to $11,25-13.5 billion fleet of grain-carriers will have to increase by 10 0000-12 000 cars, or 52-82mm%, compared with the 2017
At United wagon company stated that its capacity can annually produce 5,000 grain cars. Uralvagonzavod (UVZ) talking about the launch of the shop hoppers where you can do and grain.
Producers fear that the deficit of grain will come already in 2019-2020, the General Director of the Institute for agricultural market Dmitry Rylko believes that by the end of the current season Russia can export about 52 million tons of grain, and by 2024 – 58-60 million tonnes.
As previously reported by the newspaper Gudok, RZD began testing the transportation of grain in containers due to the shortage of wagons. The first shipment of wheat was sent from Samara region at the Kuibyshev road, grain have already arrived in Saint Petersburg.
22 may, first Deputy Minister of agriculture of Russia Dzhambulat Hatuov held a meeting with experts of the grain market on balance sheets of grain in the regions the forecasts for the harvest and export plans for the crop year 2018/2019. Dzhambulat Hatuov was briefed experts on the situation on the grain market of the country and the volumes of carryover grain in the regions.
"The heads of regional agriculture and representatives of the business community now is the time to meet with each grain exporter, to the end of July to get the full picture for exports in the region in 2018. This will allow to plan the necessary logistics, to synchronize the actions of all market participants", - wizardinput house. The Director of the Department of economy, investments and regulation of agricultural markets Anatoly Kuchenkaiser, what is the understanding on export plans already exists in the Central Federal district and encouraged other regions to expedite the collection and analysis of necessary information.
The experts were of the opinion that you should stick to conservative forecast for the harvest in 2018, defining it at the level of 110 million tons of grain, largely due to difficult weather conditions the sowing campaign. This crop, however, will ensure that the volume of exports is only slightly below the previous calendar year. The meeting was attended by the General Director of the Institute for agricultural market studiesDmitry Rylko, Director of the external relations Department of the Russian grain Union Oleg Malofeyev, President of the National Association of exporters of agricultural productively Balan, Executive Director of the National Union of grain producers Michael Privezentsev.
Export wheat prices resumed their decline
The growth trend of export prices for Russian wheat, which has been observed for the last six weeks has changed. Over the last week quotes fell by $1-2 to $212,5–213 per ton, because of the rains, which have actually dispelled the risks of drought in the South of Russia. According to forecasts, the trend changes, the risk that Russian wheat exporters will welcome the new season with prices below $200 per ton.
At the end of last week, export prices for Russian wheat fell $1, to $212,5 per ton (FOB). It was the first drop after six weeks of gradual growth, said "Sovekon". So, in the beginning of may quotations reached a record $215 per ton. According to the General Director of "Prozerno" Vladimir Petrichenko, the export price for Russian wheat was down $2 to $213 per ton (FOB).
Russian grain is cheaper on the background of falling world prices. Wheat in Chicago fell by 5% week to week to $183,7 per ton, specify in the "Sovekon". The September contract in Paris reached the level of $205,3 per ton, which is 1.2% below the close the previous week, the analysts write. According to the Director "Sovekon" Andrey Sizov, the strengthening of prices in the last few weeks before it was due to the U.S. drought and risks to the new crop in Russia and Ukraine because of dry weather. "In the end the situation was not so critical. April in the South of Russia and Ukraine were really dry, but in mid-may rains," he says. According to mister Petrichenko, rising prices for Russian wheat was largely due to excessive demand from exporters, who could not predict how the market will behave in may. Last week, the market calmed down a bit, he adds.
Dmitry Medvedev, the Prime Minister, in April 2018:
We bought wheat in Canada and some other countries, and now we stock the wheat (world.— "B")
According to the operative data of customs on 9 may, Russia exported 45.3 million tons of grain, which is 44% higher than the same period of the previous season. The volume of deliveries of wheat also increased by 44% year on year, to 35.2 million tons. At this rate of supply is already beginning to decline on the background of the approaching end of the season, indicate in the "Sovekon". According to analysts, in April, Russia reduced grain exports by 14.1%, to 4.3 million tonnes year-on-year, while wheat by 15.2%, to 3.3 million tons. By the end of may Russia can export 4.2 million tonnes of grain, including 3.2 million tons of wheat, predicts "Sovekon".
Against the background of falling export prices for Russian wheat worth the wait and reduce domestic prices in the South of Russia, predicts Andrei Sizov. Quotes in other regions, he notes, when this inertia to grow due to the partial shift in export demand in connection with the depletion of reserves in the southern regions of the country. Last week the average price of fourth class wheat in the European part of the country grew by 50 rubles. to 8.8 thousand rubles per ton, and the third remained at the level of 9.05 thousand RUB per ton, calculated in the "Sovekon".
From the index of "Prozerno", it follows that a year ago, the quotes were at the level of 8.1 and 9.4 thousand RUB thousand RUB per ton, respectively.
According to mister Sizov, the fall in export prices for Russian wheat in the coming weeks may continue. Now a guide price of new crop is about $200 per ton. But amid good prospects of grain production and high carryover stocks quotes at the start of the new season in July could fall below this figure, he believes. "Sovekon" estimate until the wheat harvest in Russia in 2018 at the level of the 78.2 million tonnes, but do not exclude the increase forecast in the near future. According to the U.S. Department of agriculture (USDA), carry-over wheat stocks at the end of the season made of 11.72 million tons.
The rates will converge with the prices of the new harvest, agrees Vladimir Petrichenko. According to him, the Russian wheat harvest of 2018 is currently estimated to be $200-202 per ton, which is $10 more than last year's prices. Amid withdrawal concerns in connection with possible drought prices of new crop Russian wheat fell from about $204 to $203 per tonne (FOB), adds the General Director of the Institute for agricultural market studies Dmitry Rylko. At the same time, he points out, the old crop for a couple of weeks actually is not traded, the implementation of already concluded contracts.
The export of grain continues to move at a record pace
In the season 2018/19 Russia will retain first place among world wheat exporters, predicts the Foreign agricultural service of USDA (FAS USDA). In its first forecast for the new season, the Department estimated shipments of wheat from Russia at the level of 36.5 million tonnes, 3 million tonnes less than in the current marketing year. This volume will be the third result in the history of the country.
"Exports from Russia are expected to decrease due to the reduction of the crop. However, it will remain the world's largest exporter of wheat, given the large carry — over reserves," - noted in the review. The second place among exporters, as expected, is the European Union, which next season will increase shipments by 5 million tonnes to 29 million tonnes "Export [of the EU] fell in 2017/18 because of competition with Russia and increasing use of wheat for fodder purposes. However, the decline in the Russian harvest this year will enable the EU to regain share in the major markets of Africa and the Middle East," suggested by American analysts. USA in the season-2018/19, is expected to sell abroad 25 million tonnes of wheat, 1 million tonnes more than in the current agricultural year.
The wheat harvest in Russia in 2018, the USDA attaché forecast at 72 million tons, 13 million tons less than the record figure of 2017. "Despite a 15 percent reduction, production will be the third largest in the country's history and the expected yield of 2.77 t/ha will be the second after last year's record," says the review. In this case, where it is specified that the forecast given excluding the Crimea, where, according to Rosstat, last year was still collected 871 thousand tons of agriculture. As noted by the US Department of agriculture, weather conditions for developing winter wheat are still favorable, while dry weather reduced moisture levels in some regions of southern Russia. "The potential yield of winter wheat will largely depend on the weather in may and June," — recalled in the report.
However, Russian experts assess the U.S. Department of agriculture overly cautious. So, the current forecast of the analytical center "Sovekon" is located at 78 million tons , the Institute for agricultural market studies (IKAR) expects wheat production in the season 2018/19 At 75-80 million tonnes, "the sowing this year has shifted, but now it is rapidly catching up with last year pace, explained, "the Agroinvestor" the head of the grain direction IKAR Oleg Sukhanov. — In addition, this year for overall good moisture, and favorable temperature regime is accelerated vegetation". Therefore, according to him, while we can expect that the harvest will be the second highest since record-85,9 million tons in 2017.
Corn and barley
Among other grain agricultures USDA FAS this year, predicts a sharp increase in the gross harvest of corn. According to analysts, it will reach 19 million tons, which is 44% or 5.8 million tons higher than a year earlier. Due to the increase in harvest will increase the volume of exports, which could increase by 56% to 7,5 million t. Such dynamics analysts attribute the anticipated steady demand from the Middle East and North Africa, and East Asia. The world's largest exporter of corn in 2018/19 will remain the US, which due to the reduction in harvest would reduce exports by 4 million t to 53 million t. Argentina and Brazil, by contrast, will increase sales by 2 million tonnes to 27 million tonnes and 31 million tonnes respectively.
Barley production, as in the case of wheat, will decline compared with last year's record. On the assessment of the FAS USDA, this year's harvest will total 18.5 million tons, which is 8% less than 2017 (excluding the Crimea, where in 2017 were collected 416 kt). Despite this, the export of agriculture in the next season will continue to grow, up 0.1 million tons to 5.5 million tons, says the American Agency. As explained in the review, this assessment was given on the basis of lower supplies from other major exporters. For example, Canada in the next marketing year will reduce the export of barley by 0.5 million tons to 1.5 million tons, and Ukraine — 0.9 million tonnes to 4 million tonnes, while the growth of exports from Australia and the European Union to 7 million tonnes.
Absolute export record
In the current season of the Russian export continues to move at a record pace. According to the analytical center "Sovekon" from July to April abroad shipped 44.2 million tons of grain, which is almost 25% higher than the total for all of last season. Including the export of wheat exceeded all previous season by 27 percent, or 7.2 million tons, barley — by 64% or 1.9 million tons, the export Volume of maize is 11% lower than the season-2016/17. According to the operative data of the Federal customs service, may 9 grain supplies exceeded 45 million tons, including more than 35 million tons of wheat, more than 5 million tonnes of barley and 4.8 million tons of corn.
In April, Russian grain exports fell by 14% to 4.3 million tonnes (March 2018 — 5 million tonnes). Most significantly, compared with March fell wheat exports by 15% to 3.3 million tonnes and Also reduced the volume of exported barley (11% to 350 thousand tons) and maize (11% to 636 thousand tons). "The main reason is the seasonal curtailing the pace of export sales as you approach the end of the agricultural year. Exporters are increasingly cautious to conclude new contracts", — says "Sovekon". So, the supply of wheat to Egypt, which is the main buyer of Russian grain, in the past month fell by 38% to 636 thousand tons, exports to Turkey by 47% to 305 thousand tons. As analysts "Sovekon" these figures are the minimum for the past five months. For this reason, the export of grain may be reduced and may. According to the forecast of the analytical center of "Rusagrotrans", the exports by the end of this month is projected at 3.6−3.7 million t However, this is 1.6 times more than in may 2017 (2.3 million tons), said to "Interfax" the head of the center Igor Pavensky. According to him, applications for grain shipment through deepwater ports already account for about 1.9 million tonnes.
With the current pace of grain exports in the season-2017/18 analytical center of "Rusagrotrans" forecast at 51.7 million tonnes, including 40.5 million tonnes of wheat, 5.3 million tonnes of barley and 5.5 million MT of corn. The latest forecast "Sovekon" — 51.9 million tons, including 39.7 million tonnes of wheat, 5.5 million tonnes of barley and 5.1 million tons of corn. FAS USDA in its may survey estimated the Russian wheat exports to reach 39.5 million tons, barley — 5.4 million tons, corn — 4.8 million tons
An experimental consignment has been shipped from the Samara region in Saint Petersburg
The shortage of grain "Russian Railways" (RZD) organized an experienced shipping wheat in containers, the newspaper "Gudok". According to the newspaper, the first batch of grain in the four containers in the composition of freight trains last Friday arrived from the Samara region in Saint-Petersburg.
The experiment made in the implementation of the program of shifting loads with alternative forms of transportation, said Kuibyshev territorial centre of corporate transport service. "Harvest of grain crops in regions of the Kuibyshev road annually, and the shortage of grain transportation in containers becomes demanded by the clients", — said the head of the center Igor Chechulin. In addition, in spring in some areas has imposed temporary restrictions on the movement of vehicles exceeding maximum allowable axle loads.
Given the potential demand for the service, Kuibyshev railway, intends to organize grain transport in container trains according to the agreed time of arrival and departure in the format of "cargo Express". As the head of sales service Center, Russian Railways, Samara Oksana Efremova, container carriage excludes the client an additional operation to transshipment from one mode of transport that provides transportation of cargo by the "door to door".
Rail shipments of grain this season are actively growing. According to Russian Railways, in January-April 2018 loading increased by 45% compared to the same period in 2017, to 9.8 million tonnes, including exports shipped 6.3 million tons of grain — on 73% more than in 2017. Leaders on volumes of grain for January-April were Saratov (908 kt, the growth in 2.8 times), Kursk (738 thousand tonnes, +32%), Tambov (699 thousand tons, +84%) and Volgograd (690 million tonnes, a growth of 2.2 times). In the Samara region the loading for the first four months of the calendar year has increased in 2,7 times up to 243 thousand tons, the press service of Russian Railways. According to Rosstat, in the past year were harvested in the region of 2.7 million tons of grain — almost 30% more than in 2016. the internal needs of the region, according to the regional Ministry of agriculture, total 1.2 million tonnes.
In terms of the record harvest and lack of grain is a definite demand for container transportation will certainly be, says the CEO of the Institute for agricultural market studies (IKAR) Dmitry Rylko. "However, container traffic is an expensive alternative to grain, so they can be used only for expensive goods like wheat is very high quality, flax, etc." — said Rylko, "the Agroinvestor". In addition, he recalled, to organize the transportation of grain in containers it is necessary to create appropriate infrastructure.
To attract additional volumes of cargo this season, Railways has set a discount of 10.3% to the tariffs for export transportation of grain from 13 Russian regions, including Samara region. According to the company, the discount is valid on its own rolling stock and transport containers. In addition, the Ministry of agriculture began to subsidize the cost of grain transportation to Russian ports by the end of April at a reduced rate were exported 1.79 million tons of grain of the intended for this season of 3 million tons However, from the Samara region shipped only 51 thousand tons at a limit of 270 thousand tons. Such a low amount, the Deputy Minister of agriculture of the Samara region Roman Nekrasov earlier it was explained by the fact that the price at which to purchase grain quotas, not satisfied with the grain traders.
According to operative data of the Federal customs service, on may 2 since the beginning of the season Russia exported about 44.2 million tons of grain, 43% more than in the same period last season (30.9 million tonnes). Including the export of wheat since the beginning of the crop year increased by 44% to 34.3 million tonnes, barley — 1.9% to 4.9 million tonnes, that of maize by 9% to 4.6 million tonnes.
Amid record exports of Russian grain prices Altai wheat until August slightly rise. This forecast was made Director General of the Institute for agricultural market studies Dmitry Rylko, at a press conference with regional media. However, experts in Moscow were asked not only about that.
– Dmitry Nikolaevich, what the harvest this year?
To say something intelligible for the Altai territory we are not yet able, as the region had not even started sowing, but it seems that the water reserves are not very good, as most of the snow did not get into the frozen ground, and the glass in the river. In European Russia the forecast quite favorable, winter crops wintered well, damaged is about 7%. In many places, the condition of winter crops is better than last year. Given the fact that the Eastern part of the country, including Siberia and Altai Krai will collect an average harvest, our conservative estimate of the wheat harvest – 72 – 78 million tons. It's a big crop, but below last year's record, when it collected 85 million tons.
– Why another big crop, if this is nowhere?
– There are two views on the future strategy of the crop. One thing – that the excess of grain should be reduced crops and, consequently, fees. But I have a different point of view. Under a high yield it is necessary to adjust infrastructure and to build new grain, create high-speed elevators that would take and let the grain with less, to continue to subsidize the export of grain from distant regions. And this is a more promising option for our farmers. I have to say that grain exports gained such momentum that by the end of the season (July 2018) stocks will be lower than last year.
Excess practically does not remain. Now there are problems with the provision of fodder to our processors in the South. In the center and the Volga region reserves more than last year, but I will not say that they are monstrous. A large stockpile is likely to remain in Western Siberia.
– Why do we have a market economy in Russia have shared the Ural mountains into two parts? Why in Europe the price of wheat 9 – 11 thousand, and in Siberia – 4 – 6 thousand roubles?
– After the country switched to a market economy, we have 20 years see a very important role in the pricing of play train fares. It seriously affects the economy of remote regions, especially Altai region. But the region still found a certain antidote, developing processing to flour and groats.
This season, some regions are particularly badly affected because of the huge crop. The whole car fleet in the fall of 2017 was occupied by the export of grain from the European part to the ports. And as a rare bird reaches the middle of Dnepr, and rare wagon and when we got to Western Siberia. Fortunately, this problem has been partially addressed in early 2018, once entered into force on the pilot programme of the Ministry of agriculture, which provides subsidies to the railroad for transportation of grain.
In accordance with government decision No. 1595 was able to buy at more or less normal price and export from the Novosibirsk and Omsk regions is about 200 thousand tons. Altai Krai in the program, unfortunately, did not participate. I think it makes sense to extend it to Altai flour. If allowed millers to export at a subsidized rate flour in exchange for raising the procurement price of wheat, it would have played into the hands of local farmers. I emphasize that there are no simple solutions, because like it or not your edge from the main markets is 3 to 4 thousand kilometers, and this despite a large harvest leads to serious costs. Nowhere else in the world is the totality of such factors.
– Could be a way out of the situation construction in the region of the plant for deep processing of grain?
– When you start to study the markets of products of deep processing of grain, it turns out that at them not all so is simple, they are quite saturated. Typically, these companies produce the main product, but the profitability is largely dependent on the realization of the enormous amount of side products. And the decision on the construction of the plant marketing requires hard work and serious examination of the project. The prospects could be quite favorable, if we could create a team of qualified associates who are able to find a marketable range of products and optimal production technology. This is a much more important task than finding the money for the project.
– How do you see the further development of the price situation on the grain market in Siberia?
– In the European part of the country last week, the price increases. This, on the one hand, contributed to the devaluation of the ruble, with another small increase in export prices from $208 to $214 – 215 per ton. The increase was achieved in Western Siberia. And we see that the local millers are already buying from 4 – 5 thousand, or 7.5 – 8 thousand rubles per ton, however, subject to the delivery of wheat to the processing plant. And I think that by the end of the season the prices will not fall, even will gradually increase. In the summer the ruble is unlikely to strengthen, and the scarcity of grain West of the Urals will increase, as the flywheel of export is not stopped. It is likely that exports of wheat taking into account the shadow of sales in Kazakhstan will amount to 40 million tons. It would be unprecedented record compared to last year's 27 million tonnes. Sales abroad of all the grain we estimate 51 – 52 million tons.
Whether deep processing to solve the problem of surplus grain
At the recent XI Winter grain conference in Belokurikha enough discussions. One of the hottest broke out around the prospects of deep processing of wheat, which in Siberia in recent years grown "for the eyes", as aptly put by one of the participants of the forum. Experts agree on one thing: without a powerful administrative resource deep processing in the regions is not raised.
Mantras and reality
The tone of the discussion asked the Deputy chief of Department of economy, investments and market regulation of the Ministry of agriculture of the Russian Federation Dmitriy Fedyushin, saying that the volume produced in Russia grain completely covers domestic consumption and generates a surplus that can be used effectively with the development of deep processing.
Representative of the Ministry of agriculture supported the CEO of the capital company "Agrosystems" Alex Desmoulins working in the field of deep processing of grain for more than ten years:
In recent years in the grain industry has accumulated problems. The first is the inadequacy of the current infrastructure to double the volume of our harvests. A classic example of the abysmal state of the elevators. As one of my colleague from Novosibirsk, "we have come to this, that the grain is not only to put nowhere, but to lay down". The second problem is logistics. The new year begins, we are fighting for preferential railway rates and get them when the grain is unnecessary. The third problem - a crisis of overproduction of grain and flour. At last year's conference spoke about the achievements of one very large company in terms of sales of their products in China. I asked its representative: how many in three years you have sold to PRC flour? It turned out, six thousand tons. This amount in a month gives the mill average power. There was another mantra that was repeated in recent years: don't be afraid to produce feed grain - livestock will eat everything. But for the needs of pigs and poultry fodder production has reached its limit, and for cattle better suited protein-vitamin mineral concentrate. The fourth problem shipping facilities emerged in the ports of Southern Russia. To carry the grain from Siberia pointless. Each season brings us by ten million tons of extra grain. Accordingly, the most acute is reflected in Western Siberia. What do the Siberians, a surplus, no one is. And the technical situation of the plane passes almost political: how to explain to the farmer why he must continue to grow wheat, if it has nowhere to go?
According to the expert, from a technical point of view, the problem of deep processing of grain in the world have long been resolved. Serial technologies and equipment successfully used in China, Turkey, Germany. And Russia imports of gluten and lysine 500 million dollars a year. In Siberia it would be possible to start with a model of the plant, which will produce gluten, lysine, ethanol, and a feed additive with a protein content of 20-25 percent. It will cost, of course, expensive - from € 90 million. However, falling grain prices in the regions are losing a comparable amount.
- Unfortunately, the estimation problems prevalent frontal and sectoral approaches. We need the state program. Regions that are ripe for the construction of such a plant, should come up with suggestions to the government to get to these goals Federal funds, and then share our experience. Because one plant globally will not solve anything, - said Desmoulins.
Bioethanol - the prospects and risks
According to the Director of the Institute for agricultural market studies Dmitry Rylko, yet the only realistic direction could be the production of bioethanol. Unlike other products you can produce and sell in huge volumes. In the world for the production of bioethanol annually is about 500 million tons of agricultural products, of which 310 million - sugar cane, 158 million - corn and five million tons of wheat.
- In the present state of the Russian car industry, according to experts, the fuel can be recycled up to six million tons of grain a year - in the form of a gasoline additive. The main limitation is the lack of state support and anti-energy lobby, which argues that bioethanol replaces traditional fuels. But it's only organic additive, as opposed to synthetic, used in our fuel industry.
Incidentally, the additive that we announce environmentally friendly, use at gas stations and for which we are asked to pay in rubles more expensive than others in the West declared environmentally unsafe and replaced by the additive of bioethanol. But in order to develop in Russia prospects of the bioethanol theme, we need government support and mechanisms of administration. Otherwise it will not move, says Rylko.
Another reputable expert of the grain market - the General Director of company "Prozerno" Vladimir Petrichenko - are more cautious about the prospects of development of deep processing of grain in Western Siberia.
- It is a very expensive segment of the market. It is impossible to quickly get the result. And we have to compete with China, which is very difficult: for every blow that the Chinese have two. In addition, they want to buy grain for their own processing. The Altai Republic has to decide whether to supply China with grain, or to fight the Chinese in the field of production of lysine, gluten and other products. In terms of development of deep processing of grain more competitive looks Krasnoyarsk Krai.
In the Altai believe the Chinese market
Petrichenko, it seems no coincidence that parts of the Altai Krai - the main grain belt milling region in Western Siberia and the Krasnoyarsk agricultural flagship of Eastern Siberia. After all, the experts from these regions have assessed the situation differently.
Permanent guest of the conference the General Director Achinsk grain base N 17 Alexander Levitsky theme of deep processing of grain called very interesting, but, however, also noted that the required public-private partnership. To build such a plant, it is necessary to open the area of tax preferences, a sort of territory of priority development.
But Altai farmers unanimously expressed skepticism. It is possible that their evaluation leaves a negative mark recent past. Ten years ago Altai agro-industrial company "PAVA" made the decision to build a plant for deep processing of wheat on the basis of rebrikhinskiy flour mill. Construction was to begin in the summer of 2008. For the implementation of the project required about 150 million euros. The company was going to sell twenty percent of its shares on a foreign stock exchanges and to raise additional funds. To recoup resources expended in "Pave" planned in five years. The profitability of the production of alternative fuels was expected to be 20-25 percent. Initially intended to produce one hundred thousand tons of bioethanol a year, and then increase the production of fuel twice. To export alternative fuel like in Japan, Korea and EU countries. But the grandiose plans ended in a loud zilch: "PAVA" went bankrupt and was liquidated.
In the "zero" years ambitious projects was in the order of things, but now the farmers are forced to count every penny.
- Bioethanol is too expensive for us. That China for the Altai farmers - a serious saving. He at hand. We are slowly learning to work with each other, - says Alexey Melnikov from "SEUS".
Valery Gachman, President of the Union of grain processors of Altai:
- With a yield of fourteen or even twenty tons per hectare to us impossible to compete with Brazilian producers of ethanol from sugar cane. But China will buy our grain, because it is, in the understanding of people in China, environmentally friendly, whereas the level of environmental contamination of their fields exceeds the limit.
Program subsidized rail transport of grain to equalize prices in the domestic market may be not only extended, but expanded, the Ministry of agriculture suggests to subsidise in addition to the rates and services operators for the provision of grain wagons during transportation of products from the regions of the Siberian Federal district to the ports. According to preliminary calculations, this benefit could cost the budget up to 3 billion rubles.
USDA proposes to expand the program of subsidizing of railway transportation of grain — a measure remote from the ports of the regions of Siberia yesterday at a government meeting announced the Minister Alexander Tkachev.
As explained "Kommersant" in the Ministry, to align the profitability of agricultural producers in Siberia with other regions are encouraged to subsidize the entire freight cost for transportation of grain by rail from the stations of the regions of the Siberian Federal district (SFD) in the direction of the regions—consumers of grain. On the idea of the Ministry of agriculture, the government will subsidise the tariff of loaded and empty wagons, as well as services operators for the provision of railcars-grain carriers — recipients of such grants will be RZD and rolling stock operators.
Now, tell us in the Ministry of agriculture, the computation of budget appropriations necessary to implement such measures— it can cost 2.5–3 billion RUB. Note that the subsidization rates for the provision of cars (in this way it is intended to compensate the operator is not enough profitable work) is under discussion, there is no solution. At the same time subsidizing transportation of agricultural produce from SFO is not new. With the beginning of the year to reduce the internal pressure to the market in connection with a record harvest (135 million tons) preferential tariff for the export of grain from regions located far from sea ports (Voronezh, Kursk, Lipetsk, Orel, Tambov, Orenburg, Penza, Samara, Saratov, Ulyanovsk, Kurgan, Novosibirsk and Omsk regions). This support program is designed to 1 July 2018, but Vladimir Putin address to the Federal Assembly instructed the government to study the possibility of renewal.
For the program, the government allocated 3 billion rubles that will be reimbursed by the Railways for the provision of benefits limits have been disbursed by 30%. According to the agriculture Ministry, on 13 March it was agreed to export at a preferential rate 959,4 thousand tons of grain for the total amount of subsidies 902,4 million RUB Some region (Omsk and Novosibirsk) are already completely chosen limits subsidies for transport.
The provision of wagons by the operators while on market principles. In this case, as told "Kommersant" the operators of the grain, the deficit in Russia, co-owner of "Rusagrotrans" Constantine Deadbolt in an interview with "Kommersant" in September of 2017 said that the market is balanced with an emphasis in surplus. Rather, the problem is bottlenecks in infrastructure (for example, in the North-Caucasian railway) and in the spasmodic presentation of farmers grain for transportation: first, they are waiting for favourable prices, then at the same time presenting a large amount of grain.
The Ministry of agriculture fear that in the conditions of a record harvest this season, export capacity to 50 million tons, the projected carryover stocks of grain, as well as the projected harvest of the season-2018/19 110-115 million tonnes of the existing number of wagons to ensure stable transportation of grain by rail is not enough. "Given the turnover of grain cars, the additional demand will be no less than 7 thousand pieces," waiting in the Department. Note that due to the lack of grain the Railways are already beginning to use covered wagons, container ports master sending grain.
© Newspaper "Kommersant" №44 from 16.03.2018
The Minister of agriculture of the Russian Federation Alexander Tkachev instructed to amend the plan of concessional lending to borrowers in 2018 and to provide for the allocation of subsidies to authorized banks for the provision of borrowed funds with interest rate of 5% per annum of the grain processors of Altai region.
The decision came after telephone negotiations of Alexander Tkachev, the Governor of the Altai territory Alexander Karlin, during which was discussed the question of allocation of preferential short-term credits Altai enterprises to purchase grain for industrial processing. The borrowing will allow in the near future at the same time to withdraw from the regional market, in addition to the current procurement, about 250 thousand tons of grain. This measure will contribute to the stabilization of the regional market and will lead to an increase in purchase prices for grain to 7800 - 8000 rubles per ton on the basis of the Franco-Elevator.
At present, enterprises in the region work with banks, the issues of concessional loans in the total volume of about 2 billion rubles for the purchase of grain, according to the regional Directorate of food processing, pharmaceutical industry and biotechnology.
The Ministry of agriculture of Russia also intends to provide system support the milling industry in the near future to resume concessional lending for grain processors from the regions of Siberia and the black earth.
Chinese authorities have lifted a ban on the import of wheat from six regions of Russia: Chelyabinsk, Novosibirsk, Omsk and Amur regions, and the Krasnoyarsk and Altai territories. The quarantine on the import of grain was introduced in 1997 due to the intrusion of the Indian and dwarf smut. A leading expert on the grain market of the Institute for agricultural market studies (IKAR) Yevgeny Zaitsev said in an interview PROVED about the prospects of Russia in the Chinese market.
– What makes Russian grain producer of the lifting of the ban on the import to China?
– Siberia is a strategically important, because these regions are not major markets abroad is only a small supply in neighboring countries, such as Mongolia. The second export option is to transport grain across the country to the big water, where, in principle, there is a high competition. In this situation it makes no sense to choose the amount of grain in Siberia, when they are at hand, near the ports. This season even more irrelevant, as the situation with the lack of cars, plus the framework is loaded.
Strength test high production of grain throughout the whole country confirms that the East of Russia, i.e. all of the territory located beyond the Urals, it is necessary to form their own markets. This will help farmers to maintain the price level.
– China is a perfect solution for Siberians?
– Again, it is strategically important to cooperate with China. China needs every year to 4 million tons of imported wheat in the middle. And Siberia is able to provide.
But this has its own complications, its own characteristics. And these features, due to the fact that while we are only talking about test purchases of Russian grain to the Chinese. While we are not talking about large-scale transactions. Well, if in the current year the volume of test purchases will reach 100 thousand tons. That is, if all the stars also rise. The called number is the maximum for the coming season. Next year will see – it may be a different picture.
– Tell us a little more about the specifics of work with China.
– The Chinese are very long tested products. Will buy small lot, load their hard workers to turn bags. Although, perhaps, China will refuse sack tare and will make purchases of grain as they do all over the world – bulk.
A lot of infrastructure details. For example, we are talking about deliveries by rail, but the us and China different width of railway gauge, and this issue must be addressed. Many issues with China must be resolved to speak about any scale supplies.
– What grains are going to buy Chinese this year?
– China will buy a good grain: third grade wheat with high gluten content. The question of interest on the part of China shot just because they opened the border for our grain. So they need it.
– Who is our competitor in the supply of grain to China?
– Land? Almost no one. Basically the grain to them is by sea. We have a long border with China. And you should also understand that China is a big country, serious, with very different regions.
The point is that the Chinese have interest in our grain, and we have the opportunity and their interest in the implementation of these supplies.
– What is the rating of grain exports from Russia in 2018?
– Estimates of IKARis to 48.6 million tons, wheat – 37.5 million tonnes for the season.