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Country Briefs

  Russian Federation

Reference Date: 03-April-2017

HIGHLIGHTS

  1. Cereal production in 2017 is forecast slightly below last year’s record level

  2. Cereal exports set to reach a record high in 2016/17 marketing year

  3. Export prices for wheat increased over the last six months

Early indicators point to a small reduction in 2017 harvest from last year’s record level

Around 17.4 million hectares have been planted with winter cereals (mainly wheat and barley) for harvest in 2017, 2 percent more than in 2016. Conditions of winter cereals are favourable as the crop exits dormancy. Growth of winter cereals has begun in the Southern and North Caucasian federal districts. As of 27 March, the Ministry of Agriculture reported that spring grains were planted on the area of 0.5 million hectares (1.7 percent of the total forecast).

FAO’s early forecast puts 2017 aggregate cereal production (winter plus spring crops) at about 111 million tonnes, 6 percent below the record of last year. This reduction is essentially due to expectations of average yields, below the high level achieved in 2016 and some reduction in area planted under spring crops.

Cereal production reached record in 2016

The latest estimate of 2016 cereal production stands at a record level of 118 million tonnes following exceptionally high yields.

Wheat production is estimated now at 73 million tonnes, 19 percent up from last year following better-than-expected yields although the share of high-quality wheat is reported to be smaller than the previous year. Maize output also reached a record level of 15 million tonnes in 2016 as a result of increased plantings and higher yields. Better yields also contributed to small increases in production of barley.

Cereal exports in 2016/17 marketing season set to reach record high levels

Despite record domestic production in 2016 and the wheat export tax set to zero, the pace of grain exports fell short of market expectations since the beginning of the marketing year. Total cereal exports in the 2016/17 (July/June) marketing year are now set at around 37 million tonnes, still a record and 6 percent above the previous high level achieved in 2015/16, but below expectations at the beginning of the season. Most of the increase is expected to come from higher wheat exports, which are forecast at 28.5 million tonnes. However, the forecast can be downgraded since Turkey excluded the Russian Federation from the list with zero imports in mid-March. As a result, the country might face difficulties to re-orient the supplies of agricultural products usually exported to Turkey. Maize exports are set at 5 million tonnes, 3 percent above the high level of 2015/16, following abundant domestic availability.

Export prices of wheat and wheat flour increased over last six months

Export prices of milling wheat showed an increasing trend over the past six months supported by strong demand from key importers. At the beginning of the winter, prices were also underpinned by concerns about growing conditions for the recently-sown 2017 crops in certain areas of the Black Sea region. However, improved conditions of winter wheat crop and concerns about trade with Turkey are expected to put some pressure on wheat export prices in the coming months.

Domestic prices of wheat declined in March, and were 9 percent below their values in January 2017, mainly reflecting the strengthening of the Russian Rouble.