27 Mar 2023 16:35

Russian grain exporters intend to create own fleet of freight cars

MOSCOW. March 27 (Interfax) - Grain exporters, who this season faced a shortage of hopper cars for transporting grain and rising transportation costs, intend to form their own railway car fleet.

A consolidated bid for the purchase of rolling stock is being prepared by the Union of Grain Exporters, Eduard Zernin, chairman of the union's board, told Interfax.

"The union is preparing a consolidated bid for the purchase of grain hopper cars from 2023-2025. Their deficit, coupled with a serious increase in transport tariffs, was the main topic of the recent meeting of grain exporters in the Ministry of Agriculture," he said. "In addition to the high rates already traditional for this freight season, exporters noted an increase in the cost of domestic road transportation by an average of 50%, and by rail - twice.

Moreover, some traders have already received a notification about the next increase in railcar rates starting April 1, he said.

According to Zernin, the issue of trucking is less acute. "There are many players in this market, and it is quite competitive," he said. "But this applies only to the south of Russia, where short distances make it possible to do almost without rail transportation."

"In other regions, where the possibility of trucking to export ports is limited by the length of the logistics arm, exporters are forced to use rail transport, and rates for wagons have already been indexed three times," the head of the union said.

The situation in this segment of transport services has attracted the interest of the antimonopoly authorities. "Russia's Federal Antimonopoly Service, FAS is working on the issues raised at the Ministry meeting," the committee's press service told Interfax.

"The growth of transport costs is reflected in a decrease in purchasing activity and grain prices in the regions. This is fraught with the fact that farmers will not be able to sell surplus crops to exporters even at today's prices," Zernin emphasized.

As reported, this season, agricultural producers, with a record grain harvest of 157.7 million tonnes, have accumulated large stocks, which are "putting pressure" on the market. According to Rosstat, the stocks of wheat stored with Russian agricultural organizations in February reached 17.3 million tonnes, almost 1.6 times more than a year earlier. The total balance of grain and leguminous crops is 28.8 million tonnes, almost 1.5 times more than in 2021.

Meanwhile, grain exporters, whose operations on the world market are hindered by hidden sanctions, including the refusal of ship owners to provide ships, plan to form their own fleet. As Deputy Prime Minister Victoria Abramchenko stated earlier, there are plans to build over 40 vessels for the export of agricultural products. Thus, the United Grain Company announced its intention to purchase 5 used dry cargo ships on the international market by 2025, as well as order the construction of 14 bulk carriers from Russian shipbuilders.