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Country Briefs

  Russian Federation

Reference Date: 06-February-2018

HIGHLIGHTS

  1. Area planted under 2018 winter cereals forecast to be similar to 2017 high level

  2. Cereal production in 2017 estimated at record level

  3. Cereal exports set to reach record highs in 2017/18 marketing year

  4. Export prices of wheat remained above their year-earlier values

Area planted under winter cereals in 2018 forecast to be similar to 2017 high level

Planting of winter cereals (mainly wheat) to be harvested in July/August 2018 was completed by the end of November 2017. According to official forecasts, around 17.12 million hectares were planted, close to 2017’s high level. Above-average temperatures during the November-December period were favourable for the survival of winter crops and good snow coverage offset the negative effects of the cold spells in January.

Cereal production reached new record in 2017

The 2017 aggregate cereal production (including winter and spring crops), is estimated about 10 percent above the 2016 high level. The increase is mainly due to the record high wheat output, estimated close to 86 million tonnes, due to favourable weather conditions during the summer months that boosted yields. Barley output is estimated at 20.6 million tonnes, about 14 percent more than 2016 output, mainly as a result of larger plantings. By contrast, maize production is estimated at 12 million tonnes, showing a 20 percent decline from the 2016 record level. The current estimate of maize production has been revised downward by 2 million tonnes since the beginning of the season due to dry weather conditions in the summer and excessive rainfall during September and beginning of October, which delayed the harvesting campaign.

Cereal exports set to reach record high levels in 2017/18

Total cereal exports in the 2017/18 (July/June) marketing year are forecast at about record 43 million tonnes, almost 20 percent above the high level of 2016/17. Most of the increase is due to higher wheat exports, which are forecast to reach a record of 35 million tonnes, as limited availability of quality milling wheat in other exporting countries boosted import demand for Russian wheat. In particular, the Government of Egypt, the largest wheat buyer, imposed new requirements for imported wheat, raising the protein content from 11.5 to 12.5 percent for wheat bought from the Black Sea region. This measure favoured Russian exports as locally-produced wheat has higher protein content compared to Ukrainian wheat.

Amid record supplies of wheat in the country, the Ministry of Agriculture granted a rail freight compensation for export grain deliveries from distant areas, including Siberia, Ural, Volga and Central regions. According to custom data, as of 17 January 2018, the country exported 22.6 million tonnes of wheat since the start of the marketing year in July 2017, about 35 percent above the corresponding period in the previous year.

Maize exports are forecast at 5.5 million tonnes, 10 percent above the high level of 2016/17.

Export prices of wheat remained above their year-earlier values

In the past three months, export prices of wheat remained above their values of a year-earlier due to a solid pace of shipments. Strong import demand, particularly from Egypt, high international prices and strengthening of the national currency underpinned prices and offset the downward pressure due to the 2017 record crop. Export prices in January 2018 were around 5 percent above their values of a year earlier and around 3 percent above their lower levels of September 2017.

Despite the high pace of shipments, abundant local supplies from the record 2017 harvest continued to weight on domestic prices of wheat grain. As a result, domestic wholesale prices of milling wheat in January 2018 were 20 percent below their levels of the year earlier. However, over the last three months, prices received support from high export demand and increased slightly from their low levels of October 2017.

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