Grain market experts reduce grain export forecasts from Russia in MY 2016/17 due to the tightening of the supply to Turkey and Egypt.
As ProZerno reports, General Director of the Institute for the Agrarian Market Studies (AMS) Dmitry Rylko noted: “The other day, we lowered the forecast for wheat exports from 28 MMT to 27.5 MMT and it is possible that the trend will continue to reduce to 27 MMT”.
According to him, this decrease is “partly connected to Turkey” and also with the fact that exports in March-April will not be as high as it predicted before.
“We thought that in March, 3 MMT of wheat will be exported but we are most likely will export 2.5-2.6 MMT,” he said.
However, Dmitry Rylko stressed that the new forecast for wheat exports is a record figure.
According to the head of AMS, most of the grain that has been planned to be exported to Turkey before the end of the agricultural year (until June 30, 2017), will be redirected to other countries.
“There were about 500 KMT of wheat to be sent to Turkey, 300 KMT of them are likely to be sold on other markets and not necessarily at a discount. The only problems might occur with 200 KMT of high-protein wheat, which Turkey has traditionally bought from Russia” – he said.
Vladimir Petrichenko, the general director of the center ProZerno, has also reduced the forecast of grain exports from Russia.
“The optimism that was in the beginning, disappeared due to the “Turkish gambit” – the export of grain is likely to be in the amount of 36.6 MMT, including 27.2 MMT of wheat”, – he said. Notably, that previous optimistic forecast for export amounted to 39 MMT of grain, including 29 MMT of wheat.
The new estimate is even lower than its previous pessimistic forecast – 37 MMT.
At the same time, Petrichenko drew attention to the fact that with the reduction in exports, the transition stocks of grain could significantly increase. By July 1, 2017, he estimates them at 22.5 MMT against 13.2 MMT on July 1, 2016.
He said that by the end of February (from July 2017), Russia exported 25 MMT of grain, of which 18.9 MMT of wheat. From the 1st to 22nd March exports amounted to 2.3 MMT.
Earlier, the forecast for grain exports in March has been decreased from 3.9 MMT to 3.5 MMT according to Igor Pavensky, the deputy director of the strategic marketing department of Rusagrotrans.
“The adjusted export estimate in March is 3.5 MMT against the previous 3.9 MMT,” – he said.
The forecast for wheat export is 2.5 MMT (1.71 MMT in March 2016), barley – about 200 KMT (299 KMT), corn – 750 KMT (703 KMT).
In March a year earlier 2.77 MMT of grain was exported, the expert recalled, stressing that, despite the decline in March forecast of this year, the shipments will still remain at a record level.
According to Pavensky, from July 2016 to mid-March 2017, 2.630 MMT of grain were delivered to Turkey against 3.512 MMT for the same period in the previous period.
“Mainly wheat and corn are exported to Turkey, which account for 95% of all exports to this country from Russia. The rest consist of barley and rice”, he explained.
In particular, wheat exports to Turkey since July 2016 has amounted to 2.075 MMT, which is 0.623 MMT lower than in the previous period; corn – 417 KMT (- 270 KMT).
Pavenskiy also said that export prices for Russian wheat of grade 4 over the past week fell by $3 to $188 per ton, despite the strengthening of the ruble.
“The decline took place because of the situation with Turkey, as well as due to the reduction in export demand in the new season,” – Pavensky said.
At the same time, the expert retained a high forecast for grain exports from the Russian Federation for the entire MY (July 2016 – June 2017) in the amount of about 36 MMT (excluding beans and flour) against 33.91 MMT in the past MY. In particular, the estimation of wheat exports is 27.6 MMT (24.6 MMT), barley – 2.6 MMT (4.3 MMT), corn – 5.4 MMT (4.65 MMT in the past MY).
