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Letter: Russian wheat clear of insect damage

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Letters to the editor should be sent to newsdesk@agrimoney.com.

From Mr Andrei Sizov

Dear Sirs,

From my understanding, worldwide speculation about Russia's bug-damaged wheat is "too much ado about nothing".

In contrast to Ukraine, spring wheat in Russia accounts some 33-35% of total wheat output (in Ukraine - a few percent).

This year, Russia harvested a bumper wheat crop in Siberia. (Our estimate for Siberia is for production of 12.3m tonnes against 9.2m tonnes last year.) Practically all spring wheat in Siberia and the Urals is milling wheat and absolutely free from bugs due to the severe winter, as is the case in Canada too.

It is also worth noting that the bumper crop provoked a sharp drop in wheat prices in Siberia, which has co-incided with strong export prices for 1% bug milling wheat at the Black Sea port of Novorossiysk.

As a result, Omsk, in the western region of Siberia, is now occupied by traders from Russia's major exporting companies, rushing to contract Siberian wheat at some $100 per tonne FCA (in good old times FOR - Free On Rail). (NB - Payment in advance.)

Novosibirsk, the part of Siberia to the east from Omsk, introduced a special rail subsidy of some $10 per every tonne delivered from the region, from December 1, which makes effective shipments from this region to Novorossiysk as well.

This shows how Russia can achieve serious shipments of Siberian wheat - absolutely free from bugs - for exports to Egypt and Jordan.

Yours sincerely,

Andrei E. Sizov

Moscow

By Agrimoney.com

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