grain export curbs in a package of measures to stabilise domestic grain markets
after drought damage which has left the country facing its worst wheat harvest
in nine years.
agriculture ministry, at a much-anticipated food security meeting to discuss
shrunken crop supplies, narrowed its grains harvest forecast to 70m tonnes, at
the bottom of a previous range 70m-75m tonnes.
However, officials failed
introducing the limits on grain exports which many traders had expected given
the harvest shortfall and a rapid pace of shipments which, according to Deputy
Prime Minister Arkady Dvorkovich have reached 4.6m tonnes since the 2012-13
crop year started last month.
"As long as I
am in charge of this sector, I will be against any export restrictions,"
Mr Dvorkovich said.
the agriculture minister, estimating Russia's exportable surplus of grains at
10m-14m tonnes said that "domestic requirements will be covered 100%"
despite the lack of curbs.
The refusal to
introduce restrictions caught many investors off guard, given the country's
waning harvest hopes.
influential analysis group, on Thursday cut by 1m tonnes to 38m tonnes its forecast for the wheat
crop, below the 2010 level which prompted a full export ban, although Russia
this month acceded to the World Trade Organization, limiting its scope for
unilateral action on trade.
|Closing wheat prices Friday|
Chicago (December contract): $8.89 ½ a bushel, -1.5%
Kansas (December): $9.06 a bushel, -1.1%
Paris (November): E263.75 a tonne, -1.1%
Minneapolis (December): $9.48 ¼ bushel, -0.7%
London (November): £204.85 a tonne, -0.6%
On Friday, rival
consultancy Ikar cut its forecast for Russia's total grains harvest to 69m-70m
tonnes, including 39m-40m tonnes of wheat
And farm operator
Trigon Agri revealed that it had abandoned significant acreage because of the drought, with
yields on what it had harvested at its Stavropol farms falling below 0.5 tonnes
per hectare, from 3.34 tonnes per hectare last year.
Agritel noted that, before the food security meeting, "Russian traders
mostly expect a restriction of grain exports from October".
In Chicago, wheat
prices eased after the result of the meeting was announced, with the December
contract, which had risen to $9.06 a bushel before the decision, retreated to close at $8.89 ½ a bushel, a drop of 1.5% on the
Paris wheat for November ended 1.1% down at E263.75 a tonne.
decision has set the markets back a bit," Mike O'Dea at FCStone said.
At RJ O'Brien, Richard
Feltes said: "Some quarters were surprised at the forceful statement by the
agriculture minister and deputy prime minister underscoring their intentions to
continue exporting grain."
'Sold out by November'
without export restrictions, traders voiced doubts over Russia's capacity to continue
for long its pace of grain exports, which Ikar pegged at 3m-3.3m tonnes, and SovEcon
at 3m tonnes, taking total shipments for the first three months of 2012-13
nearly to 8m tonnes.
"It will be
interesting to see if Egypt tenders over the weekend to get in the front of the
line for more cheap wheat," Mike O'Dea said.
Egypt, the top wheat
importer, has already bought 300,000 tonnes of Russian wheat this month.
Mr Feltes said the
data suggested that Russia would be "sold out by November", shifting import
demand to other suppliers.
mulling the "possibility that Kansas [hard red winter wheat] contracts may
invert if Black Sea wheat discounts to US continue to narrow, and ultimately
push more wheat export business to the US".