Russian grain exports to remain high in March

MOSCOW - Reuters

File photo of an employee working at an elevator, transporting grain from a lower storage to the upper stage of a warehouse, in the town of Blagodarny. REUTERS Photo

Russian grain exports are expected to remain high in March after record supplies in January and February due to the weakening of the ruble, SovEcon agriculture consultancy said in a note. 

In February, grain exports are expected to reach a record level for the month of 2.2 million tons, including 1.5 million tons of wheat, 200,000 tons of barley and 450,000 tons of corn (maize), it said. 

As a result, Russia’s July-February grain exports may also reach the highest level for the period at 25.2 million tons, up from 24.75 million tons for the same period of 2014/15. 

“Exports are also expected to remain high in March thanks to fulfilment of (forward) contracts signed in the period of the sharp weakening of the ruble in December and January,” SovEcon said. Russia exported 1.77 million tons of grain in January, down from 4.18 million tons in December, it added, citing official customs data. 

The customs service has significantly upgraded its December data compared with the original estimate and has slightly raised its data for November and October after it added wheat supplies previously classified under temporary declaration measures, SovEcon said. In total, Russia exported 23 million tons of grains, including 16.85 million tons of wheat, between July and January, down from 23.5 million tons for the same period in the previous marketing year. 

Meanwhile, Russian grain export prospects for the rest of the marketing year, which lasts until June 30, look less certain as the ruble has stabilized in recent weeks and domestic grain prices have risen, SovEcon said. 

Among other risks, it said, grain exports via the country’s shallow-water ports may also be complicated in the coming months by construction work on a bridge from Russia to Crimea, which was annexed by Moscow from Ukraine in 2014. The bridge should be ready by 2018, according to a government plan. Risks for supplies to Egypt, the largest buyer of Russian wheat, have also risen due to disputes about permitted levels of a fungus present in wheat worldwide called ergot, and also due to delays in payment for previously agreed contracts. 

Demand for Russian grain from Turkey, the second-largest buyer of Russian wheat and the largest buyer of its corn, has also been weakening due to a good domestic harvest in Turkey and the political standoff between Ankara and Moscow, which made long-term contracts more risky.