Monday, 14 November 2016

Early season forecast on Russian grain exports revised downwards

Analysts are starting to rein in their forecast on Russian grain exports made earlier in the season.

Previously high predictions were driven by reports of record breaking crops and the not unreasonable assumption that all this extra grain would find a home outside Russia.

But it seems that as questions started to be asked about the quality of that grain, previous record breaking export forecast have started dropping.

The Russian Ministry of Agriculture now report their grain export forecast for July 2016 to June 2017 is 35mmt, down from 40mmt, including wheat from 30mmt to 28mmt.

Rusagrotrans forecast 35.4mmt, down from 37mmt, including wheat down from 28mmt to 27mmt and IKAR lowered their forecast from 40mmt to 39.4mmt including wheat from 30mmt to 29.5mmt.

Russia’s Ministry also  reported that, as of November 9, grain exports for MY16/17 are down nearly 5% on the same period last year at 14.017mmt (14.706mmt in 2015).

Rusagrotrans initial October export forecast was 3.7mmt, but they say that due to bad weather, specifically wind keeping water levels low in the Azov and stormy conditions in the deep water Black Sea ports, it dropped to 3.2mmt, 

Russia has the capacity to handle around 4.0mmt of grain exports each month so they could still, in theory, export a further 32mmt on top of the 14mmt already shipped.

Except that quality issue still hasn’t gone away.  Couple of weeks back Russia’s phytosanitary service released a report (here) on barley quality saying that many experts had called into question the quality of this year’s crop without having any reliable data. 

To be fair they didn’t shy away from the results which showed that only 4% of the sample was 1st class compared to 14% last year.  My assumption was they would conduct a similar survey for wheat but I haven’t spotted anything yet.