Russia's grain exports will slump further this season than
had been thought, amid continued talk of imports heading for the country
despite a decision not to ditch a levy on buy-ins.
Russia's farm ministry is to cut to 14m tonnes, from 15.5m
tonnes, its forecast for grain exports in 2012-13, deputy minister Ilya
Trade at that level would represent half the 28m tonnes
shipped in 2011-12, on US Department of Agriculture estimates, and imply only
minimal exports for the rest of the season, with the tally already at some 13m
The strong early pace of shipments in 2012-13 has nearly
exhausted exportable supplies undermined by a poor harvest last year, when
dryness slashed wheat production to a nine-year low.
Indeed, stocks will end 2012-13 at 9m tonnes, down from 19m
tonnes a year before, Mr Shestakov told reporters.
Wheat stocks at agricultural enterprises, excluding small
farms, as of January 1 stood at 13.3m tonnes, down 39% year on year,
consultancy SovEcon said on Monday, citing analysis of official data.
Russia's grain exports are of close interest to the global trade
thanks to the country's reputation as a source of competitively-priced
However, the drop in inventories has fuelled a rise in
prices which have, for milling wheat, soared 54% to 11,000 roubles ($369) per
tonne over 2012-13 so far, according to a report out overnight from the USDA's
"Prices of feed quality wheat, class 5, were increasing even
faster, from 6,575 roubles per tonne to 10,745 roubles ($356) per tonne,
highlighting the severe short of feed-quality grain," the briefing said.
At that level, "domestic prices have already exceeded
international market prices", cutting export prospects besides having a "significant
impact on the profitability of many Russian livestock and poultry producers".
Russia is attempting to ease the squeeze on domestic supplies
by auctioning off intervention supplies, with 1.45m tonnes sold since the
programme opened in October.
Mr Shestakov said that Russia would sell a further 3m tonnes
of intervention grain by the end of the year, cutting the inventories to
"If the harvest is good next year, we will consider
replenishing these stocks," he said.
Intervention stocks of class 4, soft milling wheat are
already almost exhausted, the USDA bureau said.
Purchases from the
However, the quest for grain is also said to be boosting
interest in imports, from the European Union as well as Kazakhstan.
Grain traders at a major European commodities house noted
talk "of cargoes from Baltic ports being sold for shipment to St Petersburg".
Broker FCStone said that the rise in Russian wheat prices towards record highs was "maintaining market chatter of Russian purchases of EU wheat".
Mr Shestakov on Tuesday restated a position that the
government was not ready to remove a 5% duty on grain imports which would
The USDA bureau said: "The lifting of the imports tariff
would ease imports of grain from the EU to the north-western part of European
Russia, with a large number of poultry producers and Russia's major metropolitan
"However, lifting of import duty would require a special
resolution of the government, and the changes are reported to be unlikely at
least until end of February 2013."
The major European commodities house, which has substantial
operations in Russia, said that it was "not at all clear" that the country
could lift its 5% export duty "without transgressing the trade agreement if has
with neighbouring countries such as Belarus and Kazakhstan.
"Whether or not the import duty is removed, it is quite
possible that Russia will have to import up to 2m tonnes before the end of the