16 Jan 2020 18:40

Russia's grain export potential in H1 2020 almost 23 mln tonnes - Russian Grain Union analyst

MOSCOW. Jan 16 (Interfax) - Russia's grain export potential in H1 2020, the second half of the current agricultural year, is 22.7 million tonnes, and 23 countries disappeared from the list of purchasers of Russian wheat in July-December 2019, the head of the Russian Grain Union's analysis department, Yelena Tyurina, told Interfax.

"The decrease in volumes of deliveries of all types of grains and legumes to the global market in the first half of the agricultural year led to growth in potential export volumes in the remaining period of the 2019-20 agricultural year. Calculations show that Russian's potential for grain exports in January-June 2020 total 22.7 million tonnes. That's 61.5% (8.7 million tonnes) more than was exported in the same period a year before," Tyurina said.

The potential for exports of wheat through June are 14.2 million tonnes (+3.5 million); for barley, 3.6 million (+2 million); and for corn, 4.6 million (+3 million).

Tyurina estimates the country's total grain export potential this agricultural year at 47.3 million tonnes (+3.8 million). "The growth was due to increased production of barley and corn, which raised their export potential. Potential for the export of wheat is estimated to be at the level of the last agricultural year and total 35 million tonnes." Exports are forecast to be 5.8 million tonnes for barley (+1.1 million) and 6 million for corn (+3.2 million). Other grain exports are expected to total 0.5 million tonnes, including 200,000 tonnes of rapeseed, 20,000 of sorghum, and 140,000 of buckwheat.

Tyurina said that in the first half of the year, 52% of the potential figure for the year was exported: 24.6 million tonnes. "The volume of exports fell 17%, or by 4.8 million tonnes, including by 3.8 million tonnes for wheat, 0.9 million for barley, and 0.2 million for rye. Exports grew insignificantly for corn, by 0.15 million tonnes, and by 0.02 million tonnes for buckwheat," she said.

"The low price competitiveness of Russian grain amid increased competition from the EU and Ukraine were a reason for the shrinking of its share in key broad markets of import countries," Tyurina said. For instance, wheat exports to Egypt fell 22%; to Nigeria, Yemen, and Latvia, 37%; to Indonesia, 53%; to Mozambique, 33%; and to Lebanon, 69%. Deliveries to 23 countries that bought grain a year before, such as Thailand, Ecuador, and Jordan, ceased, she said.

Furthermore, despite the high export potential, barley exports to Saudi Arabia fell 32%; to Iran, 29%; to Jordan, 62%; to Turkey, 42%; to Israel, 54%; and to Lebanon, 66%. Russia's traditional buyers like Latvia, Algeria, Cyprus, and Kuwait did not make purchases.

Neither Egypt nor EU countries have bought Russian corn this season, but deliveries of it to Turkey and China grew almost four and seven times over, respectively. Exports to Japan increased significantly.

The main task for Russian exporters through June is to boost exports and reclaim their shares in importers' markets, Tyurina said.

The Agriculture Ministry has prepared a draft government resolution that would set a 20-million-tonne quota for grain exports in H1 2020. The document is titled "On the Introduction of a Temporary Quantitative Restriction on the Export of Grain Crops Outside the Territory of the Russian Federation to States that Are Not Members of the Eurasian Economic Union."

According to the ministry, 25 million tonnes of grain was exported in the first half of the agricultural year, and 20 million can be exported in the second half without threatening the domestic market; hence the proposed non-tariff quota. The ministry is thus maintaining its grain export forecast for this agricultural year at 45 million tonnes.