According to Vedomosti, Russia this year for the first time in recent history became the world leader in the sale of wheat. This information was provided by the Ministry Agriculture USA. According to the report of this department, our country exports more than 24 million tons of wheat this year, Canada is in second place, with sales of 22 million tons, and the top three is closed by the United States with 20 million tons of wheat. Does this mean that Russia is starting to "get off the oil needle"? Will the Russian budget feel these changes, and how does the growing export of grain affect the country's food security?
Due to what did you manage to achieve superiority in the sale of wheat?
There are several reasons that allowed Russia to become a world leader. First, it has become less profitable to import wheat from the US due to the strengthening of the dollar against other currencies. At the same time, the collapse of the ruble allowed Russian exporters to withstand the price race and increase sales. Secondly, in Russia there has been an increase in wheat production in recent years, and, accordingly, an increase in surpluses that can be exported.
Who are we selling to?
The main importers of wheat in the world are the countries of Central and South America, North Africa, South-East Asia. Russia supplies wheat to more than 130 countries of the world, the main importers are Turkey, Iran, Egypt. With the decrease in export volumes from the United States, and also due to the fact that Argentina has halved its sown area, Russia began to sell wheat to Mexico, Peru, Uruguay and other Latin American countries. In Egyptian wheat imports, the share of Russian grain has grown to 25%, although until recently, 90% of Egypt's demand for wheat was provided by the United States. Nigeria halved purchases of American grain, increasing imports from Russia and Ukraine.
Can Russia increase its share in the world grain market?
Yes maybe. The need for food in the world is increasing every year. Land suitable for agricultural production is in great demand. Only the United States and Russia have such a free land resource in the world today. The increased volume of exports of our wheat was achieved at the expense of the southern regions of Russia - the Rostov Region, the Krasnodar Territory and the Stavropol Territory. Harvesting in the Non-Chernozem region and Siberia has fallen by half compared to 1990, in the North-West of the country - by an order of magnitude. More than 40 million hectares of land have been withdrawn from agricultural use, are not cultivated and are overgrown with forests. That is, the potential for increasing agricultural production in the country is huge. There is still quite a decent reserve in terms of increasing productivity in agriculture.
Does the increase in grain exports harm the domestic market?
In 2000, Russia produced about 65 tons of grain, of which less than 2 million tons were exported, in 2011 more than 90 tons of grain were produced, and 18 million tons were exported. In recent years, the country has been producing about 100 million tons, while domestic demand is almost at the same level - less than 70 million tons. That is, the increase in grain exports does not harm domestic consumption. Moreover, it allows agricultural producers to get rid of surplus grain in particularly productive years, which saves many farms from bankruptcy.
At the same time, it should be noted that the benefits for the domestic market from the growing production of grain and its exports are also not observed. There is no reduction in the price of bread in the country, and poor quality grain is used for its production in the most massive segment.
The demand for grain within the country and as fodder is not growing. In 1990, the production of grain in the RSFR was even greater than today in Russia, but nevertheless it had to be bought in addition abroad - the country had a decent livestock of large cattle. Since then, this number has decreased significantly, and much less grain is required for the production of pork and chicken meat.
Who benefits from increased grain exports?
Resellers and exporters. Large agro-industrial complexes that own the entire chain from growing grain to exporting it also benefit.
By the way, a similar situation was observed in tsarist Russia. All exports in the main grain hub of the empire - the Odessa port - at all times were controlled by several exporters, represented, as a rule, by some kind of national diaspora. The main part of the income from the grain trade remained mainly with them and with dealers.
But the increase in exports is absolutely not profitable for livestock breeders. According to experts, the closure of grain exports in 2014 was due to their lobbying efforts. This measure was supposed to reduce the cost of grain and feed production, as a result of which meat producers could receive additional export profits. All this did not affect the citizens of Russia in any way, they still no longer began to consume milk and meat due to the fallen purchasing power.
What quality grain does Russia export?
Most experts say that our country mainly produces and sells grain of the 4th class, that is, feed or food grain of low quality, and for domestic consumption it is forced to buy a little more durum grain. However, we are known to export high quality grain to southern countries Europe, for example, we supply durum wheat to Italy for the production of pasta. Our export duties on grain are arranged in such a way that it is much more profitable to trade low-quality grain than expensive ones. It can be assumed that durum wheat is grown quite normally in Russia, only it is exported under the guise of fodder. And the import of grain is explained by logistics problems - often we buy more grain for Siberia in Kazakhstan only because it is much cheaper than transporting it from the European part of Russia. By the way, when there is a crop failure in Kazakhstan, we ship grain there from Siberia. In the same way, under the USSR, they bought more grain from the USA for the Far East - it was much easier that way than to transport it by railway across half the country. Well, the internal demand for grain, of course, was significantly higher. Today, thanks to the tariff policy of Russian Railways, the problem of grain transportation is especially relevant. Farmers in Siberia, for example, are almost completely cut off from export because of this. Delivery of grain from the central regions of the European part of Russia to the port in Novorossiysk can take more than 40% of the export value of the goods.
What does the budget get from exporting wheat?
The export duty on grain is calculated as follows: the contract value is divided in half and 6.5 thousand rubles are deducted. The rest is the customs fee. If the amount is zero or negative, then the rate of 10 rubles is applied. per ton. With today's world price for wheat a little over 11 thousand rubles. per ton, the export duty is less than 0.1% of the contract value. From the sale abroad of a record 24 million tons of wheat, the state budget will receive 240 million rubles. Almost nothing. Market participants say that the export duty is generally nonsense, it kills grain production and it is strongly not recommended to introduce it. Nevertheless, in the South of Russia there is a battle for every piece of sown area.
Last fall, Prime Minister Dmitry Medvedev announced that Russia had finally achieved that the export of agricultural products reached $20 billion and exceeded the proceeds from arms sales. “Somehow we forget about it, but we are already more of an agricultural country, which we have been striving for for a long time,” the prime minister said at a government meeting. Apparently, the prime minister was not informed that third world countries with underdeveloped economies are called an agrarian country. Perhaps not everyone will be able to see in this state of affairs an object for delight.
In the Soviet Union in the early 1920s, the share of agricultural products in exports was more than 60%. But after 13 years, by 1937, the share of food in the country's exports had dropped to 20%.
Today industrial production is falling, and senior government officials are pleased that the share of agricultural products in exports has increased and plan to increase this figure.
Over the past 20 years, the export of grain crops has been the main stimulus for the growth and development of grain production. The finances received from the sale of grain are used to modernize technical equipment, purchase new varieties and expand land. However Russian market is aimed not only at exports, but also at imports of wheat and products of its processing. They are used in the food and oil and gas industries, in the manufacture of livestock feed and cosmetics.
The growing export of grain from Russia attracts investment in the agricultural sector, and this makes it possible to improve the infrastructure of entire regions: build new railway lines, improve ports and elevators, and create jobs. With an increase in investment, the yield also rises to the level of France or Germany. This happens due to the purchase of new varieties, modern fertilizers and means of pest and disease control. The high quality of soft wheat varieties makes them competitive with the grain of the leading exporting countries. At the same time, the production of high-protein durum wheat is also growing.
Proof of positive changes in the grain industry is the expansion of the presence of the Russian product on all four continents.
The development of the grain base is an incentive to improve the state of:
- feed base;
- animal husbandry;
- poultry farming;
- Fisheries;
- Processing grain industry;
- Food Industry.
The expansion of crops leads to the development of the production of machinery for agriculture, mineral fertilizers and chemicals. Investment growth leads to higher yields, greater grain exports and the implementation of an import substitution program in the production of meat and milk, bread and pasta, beer and alcoholic products.
Export of grain crops
In agriculture, the beginning of the new season is considered July 1 of the current year, and the end is June 30 next year.
Yields, exports and imports are measured per season, not per calendar year.
For the 2009/2010 season 21.4 million tons were sent for export. wheat, but already in the next season the amount of grain was almost halved and amounted to 11.8 million tons.
In 2011/2012 - 15.2 million tons, in 2012/2013 - 15.7 million tons. Season 2012/2013 was a record - only 13.7 million tons. grain was exported. But a year later, the amount of export raw materials increased to 22.1 million tons, which is 66% more than the same indicator for 2013.
Since 2014, grain exports from Russia have been steadily growing. At the end of the 2014/2015 season. shipments abroad amounted to 21.4 million tons, and already in the next season, export activity increased to 25 million tons. The total volume of cereals, together with legumes, amounted to 35 million tons, which is almost 11% more than in the previous year.
Exports for February 2018 - statistics
In the last agricultural season in the Russian Federation, 134.1 million tons were harvested. grain, which is 11.2% more than in 2016. According to the federal customs service As of January 30, 2018, about 43 million tons were exported from Russia in 2017. grain and 7 million tons. deep processing products. The export value was $5.8 billion, up 38% from the previous season.
In January of this year, 3311.2 thousand tons were sold against 2450 thousand tons. January 2017 In the period from January to April 2017, the volume of export sales amounted to 108932.5 thousand tons, which is 363 thousand tons more than the same period in 2016. 120 million tons grains.
Export crops
In addition to wheat, Russia sells corn, barley, buckwheat, millet and other grains and legumes. In 2017, about 5178.3 thousand tons of corn alone were exported, which is 154 thousand tons. less than 2016
The main importing countries are Korea and Turkey, Iran and Vietnam.
Export deliveries of barley are unstable and have been varying in the range of 2-5.5 million tons for the last 10 years. Last season, about 4,635 thousand tons were sold for sale. Where barley is exported: Saudi Arabia, Jordan, Iran. They buy grain to feed camels, whose breeding is popular in the region.
Buckwheat was sold for almost $16 million, and its total weight was 49.25 thousand tons. About 75% of the total volume went to just 3 countries. In 2017, buckwheat was exported from Russia to Lithuania, Japan and Ukraine.
The sale of millet amounted to 69 thousand tons, and legumes - 1254 thousand tons. Of the legumes, the export of beans does not exceed 1000 tons. Turkey and Ukraine in 2016/2017 are the main importers of beans from Russia. Other crops listed above are exported in small volumes. Over the past season, the amount of exported lentils did not exceed 16 thousand tons, and Latvia, Iran, Bulgaria, Morocco and Turkey became the main destination for sale. In the same year, Russia supplied millet to Ukraine, Poland and Serbia. In total, millet accounts for about 0.3% of the total grain volume.
To whom does Russia sell grain?
Since 2001, the export of Russian wheat has been at least 14% of the world volume, which allowed the country to enter the top three, ahead of Canada and France.
And last year, Russia took first place for the first time, surpassing Argentina and Ukraine.
In world trade, Russia's main competitors in the grain market are China, the United States and India. Due to the large supply of corn, the United States is recognized as the leader in the trade of grains and legumes. The main importers of Russian wheat are the countries of the Middle East and North Africa: they account for up to 70% of sales. Key directions: Egypt, Turkey, Bangladesh, Nigeria, Azerbaijan. Of the countries of the former USSR, in addition to Azerbaijan, Georgia and Armenia are actively buying Russian grain. In the countries of Europe and Latin America, Russian grain is sold in smaller volumes.
Today, Russia supplies grain to almost 100 countries of the world, while 20 years ago there were no more than 70 importers of the Russian product. At the beginning of the century, the European Union was the main consumer of grade 4 food wheat and feed wheat, as well as barley. After the introduction of new quotas and duties, the expansion of borders, the EU has reduced the supply of Russian grain. Now it accounts for about 9% of all exports.
Egypt is the largest importer of wheat and other grains. Last year, almost 7.5 million tons were delivered to this country. At the same time, interest in Russian product and in the neighboring countries of Egypt - in Sudan, Nigeria, Kenya, Tanzania and South Africa.
In recent years, the volume of sales to the countries of East, South and Southeast Asia has increased. In the 2011/2012 season their share in the purchase amounted to slightly more than 1%, but already last year this figure increased by 6.5 times. Market researchers suggest that further growth in grain purchases from the Russian Federation will be difficult due to competition with Australia. With the same grain price, delivery from Australia is cheaper than from Russia.
Russian Federation also supplies corn, sorghum, lentils, barley and wheat to South Korea, China, Pakistan, Bangladesh, Indonesia, the Philippines and Thailand. Who bought cereals from Latin American countries: Mexico, Peru, Ecuador, Colombia and Nicaragua. Deliveries to this region are complicated by competition from the United States and an active domestic grain market.
Major grain exporters
From July to September 2017 for a share of 10 largest exporters grain in Russia accounted for more than 60% of total sales. This is approximately 7.8 million tons. Topped the list of companies trading house"Reef" from Rostov, which delivered almost 2 million tons. grains. The second place is occupied by Glencore (USA, head office Krasnodar), which increased its export volume by 5%. The third position belongs to Aston. The French company "Louis Dreyfus" (head office in Moscow) is in fourth place, having increased sales from 344 thousand tons. up to 687 thousand tons Closes the top five firm from Krasnodar - "KZP-Expo".
- ZernoTrade - Russia, head office in Taganrog;
- MiroGroup - Russia, head office in Krasnodar;
- Cargill - Kazakhstan, head office in Rostov-on-Don;
- Artis-Agro - Russia, head office in St. Petersburg;
- Outspan - USA, head office in Krasnodar.
For the period 2001-2015. The ranking of wheat exporting countries looks like this: the first three places are the USA, Canada and Russia. Next are: France, Australia, Germany, Ukraine, Romania and Kazakhstan. India closes the top ten. Among the countries influencing the market are Poland and Bulgaria, the Czech Republic and Lithuania, Argentina and Latvia, the United Arab Emirates and Mexico. Sweden and Uruguay, Denmark and Belgium, Moldova and Spain, Greece differ in smaller export volume.
Grain import to Russia
On the world market, Russia acts not only as an exporter, but also as an importer of grain. Despite the fact that the Russian Federation almost completely provides domestic market own products, the country is forced to purchase new varieties, wheat processing products and high-quality grain that does not grow in Russia. Imports account for less than 1% of the volume own production. In 2016, the volume of imports amounted to only 1 million tons.
Imports of wheat in 2014 were even less - 369.5 thousand tons, in 2015 - 127 thousand tons. Russia imports milling wheat with a high percentage of gluten, as well as strong and valuable grain of the 3rd class. Wheat containing more than 23% gluten is essential in the production of bread and bakery products upper class. Third-class wheat is usually added to softer varieties to improve the quality of flour, and hard grains are used in the production of pasta.
The basis of grain imports to Russia is: rice, beans, barley and lentils. From processed products, glucose and gluten, starches, and bioproducts are actively purchased. Another major procurement item is corn seeds. The share of imported seed material accounts for almost half of the total mass. The development of processing industry, additional investment in agriculture and the organization of competition between enterprises in the Russian Federation.
In 2017, a record amount of grain was exported from Russia, and for the first time in two decades, the Russian Federation took a leading position among wheat exporting countries. To strengthen the position, it is necessary to continue to improve the cultivated land, develop infrastructure and attract financial resources to this agricultural sector. A further increase in exports will improve the condition farms, to solve food problems and problems of fodder livestock base.
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Food export is one of the most sensitive indicators of the state's economic well-being. The constant presence on the market of vital food products indicates that the high quality of products consumed by the population and independence from imports are ensured. At the same time, the weight and international prestige of the country is being strengthened. Let us consider what role the export of grain from Russia has acquired in our days.
How grain exports from Russia developed
Russia took the lead in the European food market at the end of the 19th century, when income from the sale of grain provided almost half of the profit from trade. At the beginning of the 20th century, the country became an absolute leader. Her specific gravity in world grain production was:
more than 50% of rye production;
20% wheat;
33% barley;
The collectivization of peasant farms in the USSR in 1929-1930 was based on the ideological guidelines of that time (liquidation of private property) without any assessment of the economic consequences. Excesses in the implementation of the ideas of a classless society intensified the resulting chaos. As a result, there was a sharp decline in the production of agricultural products, primarily bread.
Nevertheless, since 1930, the leadership of the USSR set the goal of regaining the lost positions of the main exporter of Europe. Intensive export of grain was dictated by the need to replenish foreign exchange reserves for the purchase of equipment and technologies for the accelerated industrialization of the country.
In 1930, 48.4 million centners of grain were sent for sale. In 1931, a severe drought struck. Undergrowth. However, 51.8 million centners were sent abroad. In 1932 the famine began. I had to sharply reduce exports to 18 million centners.
Later, until the beginning Patriotic War, a rigid state monopoly on commercial grain and export operations made it possible to maintain a course for the rise of industry at any cost.
After the war, until the end of the 1950s, the extremely high level of grain exports was explained by the need to restore the national economy, which gave rise to an acute internal deficit. The country had a card system for the sale of bread.
In the late 1950s, a number of changes took place in the domestic policy of the USSR. From the export of grain, the country began to move to import to meet the needs of the population.
In the period of formation market relations in 1991–1993, grain exports virtually ceased.
The resumption of exports (not from the USSR, but from Russia) in 1994 took place against the backdrop of a decline in production and domestic demand for grain. The shadow market of grain and grain products covered about 30% of the turnover. Instead of a purposeful state policy and a monopoly on exports, several dozen trading and intermediary firms arose, focused solely on making a profit.
A qualitative leap took place in 2001–2002, the harvest year. After 70 years of non-existence, a significant amount of grain was sent abroad. Russia has taken a worthy place in the top ten wheat exporting countries and in the top five barley producers. progress in to a large extent was supported by the growth of commodity production.
In 2003–2004 gross harvest decreased to 73.5 million tons; 6 million tons were sent abroad.
The global financial crisis that erupted in 2008 led to a catastrophic drop in prices, and grain exports became economically unviable. The situation improved due to the devaluation of the ruble carried out by the Government in February 2009; as a result, grain exports reached the current maximum of 21 million tons.
According to the results of 2009–2010. 21.4 million tons of grain were supplied to world markets.
Thanks to high quality Russian grain and competitive prices, in 2011 Russia managed not only to strengthen its position in traditional markets, but also to expand the range of consumers to 84 countries.
In 2013–2014 25.9 million tons were sent abroad, which provided Russia with the fifth place in the world in terms of grain exports, after the USA, EU countries, Ukraine and Canada. As economists noted, the world market recognized Russia as the most important supplier of grain.
The 2016 harvest exceeded 119 million tons (wheat - 73.3 million tons) - a record figure in the entire post-Soviet history.
On June 10, 2016, the US Department of Agriculture presented a report from which it followed that for the first time in the last century, Russia became the world leader in wheat sales. Export of wheat from Russia was estimated at 24.5 million tons, Canada - 22.5 million tons, USA - 21.1 million tons. Leadership was achieved mainly due to the record harvest in the south of the country.
Export of grain from Russia in 2016/2017 amounted to 36.9 million tons.
Export of grain from Russia in the modern economy
62,4 % Russian export provided by raw materials: oil, gas, coal, wood. Export share food products equals 4.7%. Formally, these are incomparable values, if we do not take into account the political and humanitarian component of food trade, interaction with developing countries.
The main consumer of food wheat is Southern Europe, primarily Italy. The issue with the return of grain exports to Turkey has recently been resolved. Very handy. Forage is exported mainly to the countries of the Middle East and Africa. Russian grain is quite competitive both in quality and price with the goods of its main rivals. The price difference is from 14 to 40%.
One of the unresolved problems of the industry is the unprofitability of the export of feed grain from Siberia and the Urals. Export terminals are located in the cities of the Black Sea basin: Novorossiysk, Tuapse, Taman. If the cost of transporting grain from South European Russia to these ports does not exceed 500 rubles ($17) per ton, then shipping grain from Siberia will cost between 1,500 ($50) and 2,000 rubles ($67).
The way out for some romantics is the construction of a terminal on Far East, which is to accept grain for sale in the growing markets of Southeast Asia. A serious consideration of this project raises many objections. Firstly, the distance from the Urals and Western Siberia to the ports of the Far East is no less than to the Black Sea. Secondly, grain production throughout the entire space from the Urals to the Pacific Ocean in good years is no more than 15% of the total. There are few prospects for the growth of sown areas in areas not affected by permafrost. Before global warming long away. "Far Eastern hectare" will not save. Thirdly, the railroad (the only means of delivery) is overloaded. And so on. Even the most rough estimates lead to the conclusion that the implementation of such a project is economically inexpedient. It is wiser to sell excess grain in the places of their production.
A more important problem that requires serious financial costs: the lack of the required amount of modern grain harvesting equipment and other means of mechanization generates unjustified losses. According to the Ministry of Agriculture, in 2016 Russia lost 10 million tons of grain (8.4% of the total harvest) due to a shortage of combine harvesters. There are reasons to doubt that this figure is not underestimated.
34% of the total volume of Russian grain exports falls on the countries of the Middle East. The main buyers are Egypt and Turkey.
Grain exports from Russia in 2016 brought in 5926.1 million US dollars, exceeding the figures for 2015 by $53.9 million, but were less than in 2014 by $1330.3 million.
According to official statistics, as of September 1, 2017, grain exports from Russia amounted to 6.9 million tons, 28% more than in the previous season (5.4 million tons). At the same time, wheat exports reached 5 million tons, exceeding the level of last year by 4.5 million tons. The export of barley almost doubled, and corn - increased 12 times (up to 502 thousand tons).
Export dynamics certain types leguminous crops in 2014-2016 presented in Table 1.
Table 1. Dynamics of exports of leguminous crops.
Forecasts for grain exports from Russia in the near future
Russian Minister of Agriculture Alexander Tkachev said at the Eastern Economic Forum on September 5, 2017: “Russia has every opportunity to increase grain exports. In the coming years, the volume of exports may reach 60-70 million tons.”
Note: it was said cautiously (“has the ability”), with the proviso that “limited infrastructure” still hinders this.
Positive moments of this season: inclusion in the sphere of trade of Asian countries and unprecedented exports of barley and corn. First of all, we are concerned about the infrastructure, which is increasingly difficult to digest the growing volumes of production.
Experts note that the quality of Russian wheat is higher than French and Ukrainian. And they consider the forecast for exports to be up to 44 million tons realistic. In terms of foreign currency, this means approximately $7–8 billion. The same forecast was made by A. Tkachev, who expressed confidence that in short time will be able to return Russia's leadership in grain exports.
Certain hopes are pinned on the growth of deals with China, which shows in recent times increased activity in cooperation with our country. China's largest food corporation COFCO plans to buy up to 4-5 million tons of wheat. Note that China buys about a third of the wheat in America.
Important details:
- Wheat prices have stabilized. Today contracts are concluded at prices of $185-186 per ton.
- The current values of grain exports are 28% higher than last year.
The total grain volume of the federal intervention fund as of September 1, 2017 is 3.98 million tons, equivalent to 36.56 billion rubles.
According to the forecast of the Ministry of Agriculture, it was assumed that in the 2017/2018 season, the grain harvest would be 100-105 million tons. However, the cold in May delayed sowing in the western regions, in some places the crops were flooded, beaten with hail. At the same time, in Siberia and the Urals, the weather was exceptionally hot and dry. As a result, the bad weather did not cause serious damage. In addition, the harvest of winter crops was higher than expected by 1.3 million tons. Therefore, it turned out that the estimates of the Ministry of Agriculture turned out to be more modest than the real data. According to the latest estimates, the grain harvest in Russia in 2017 will amount to 132.2 million tons. The record of 127.4 million tons of grain, shown in 1978 in the USSR, was broken.
The planned export of grain from Russia in 2017 - 40 million tons - can be adjusted upwards.
Contrary to the forecasts of the US Department of Agriculture, Russia is again the leader in grain exports.
Note that economics is not a sporting event. According to the President of the Russian Grain Union A. Zlochevsky, if we find ourselves even on last place, but we will earn decent money, this should suit us. And if, being in the first place, we get losses, then who needs it? It should be taken into account that this season, many countries that were importers themselves received fairly high yields, due to which the demand for wheat decreased by 3 million tons. We expected that, having resources more than last season by 5 million tons, we would be able to suppress competitors, “clear the clearing” for 8 million tons. And they miscalculated.
Most precisely, the situation in the export economy is characterized by price dynamics. In 2014, a ton of wheat in the Black Sea ports cost $320, in 2015 - $250, in 2016 - $200, and this year it has fallen to $160-180 per ton. The fall in prices is associated with a positive trend in the average harvest of market participants.
There is a risk of stopping grain sales to Egypt, which is our largest buyer (18%). The outcome of the proceedings in the Egyptian court, where a lawsuit is being considered demanding the complete absence of ergot in wheat, can be catastrophic. Note that the global standard allows for ergot levels within 0.05%. Although it is impossible to fulfill the requirement for the complete absence of ergot, the satisfaction of the claim threatens to break existing contracts with Egypt.
During 2016–2017, despite transport difficulties, Russian grain supplies to Asian countries reached 3 million tons. In the total grain imports by the region, this is a modest share - 5%. However, a fortunate coincidence arose. Droughts in Australia, Canada and the US and growing demand for grain are driving Russian grain exports to Asia, which consumes about a third of the world's wheat production.
In accordance with the forecast of the Ministry of Economic Development, the ruble will strengthen in 2017. According to the main scenario, the average annual dollar exchange rate will be 59.7 rubles. Question: Is this good or bad for the Russian economy? What industries benefit from a strong ruble?
Answer of the Bank of Russia: "Yes". So how are u strengthening of the ruble has a positive impact on profitability in capital-intensive activities, focused mainly on domestic demand.
Deputy Finance Minister Alexei Moiseev answers: "No." Since and due to the strengthening of the ruble, exporting companies showed significantly weaker results than expected.
The strengthening of the ruble will lead to a decrease in grain exports and a loss of competitiveness in the Middle East markets. We've already been through this.
Does the export of grain from Russia affect domestic production
Will Russia have enough of its own wheat to produce bread?
As stated in the materials of a special meeting in the Federation Council, due to the high harvest, there was a shortage of high-quality wheat of the 3rd class, which is used to make bread.
Bakers and confectioners did not confirm the point of view of the Federation Council: there is no shortage of wheat for bread production anywhere in Russia and is not expected. The question was closed.
In fairness, we note that in Russia there are few regions where you can get wheat of the 1st and 2nd classes, from which good bread should be made. For baking, grain of the 3rd class is most often used with additives of grain of the best class. Liberalized in the post-Soviet period, GOSTs allow this. Then there are the enhancers.
In the near future, it is necessary to find an acceptable solution for assessing the safe limits of exports. Experts warn that a repeat of the high harvest could lead to a collapse in grain prices. "Frighteningly low prices" could, in their opinion, lead to a catastrophe in the market. Since there are no drivers for a significant increase in domestic consumption, the situation on the market will be dictated by exports. And the 37.5 million tons of export forecast by the Ministry of Agriculture is the minimum volume necessary to maintain a normal balance.
According to experts, Russia will retain its position as a leader in grain exports, if only it fulfills the minimum export program. One of the reasons for the leadership is the decline in grain production in the European Union, which has temporarily dropped out of the major league of exporters.
The grain season 2017/18 turned out to be unusual for Russian farmers. In 2017, a record grain harvest of 135.4 Mt was updated. With a strong grain harvest (120.7 Mt) in 2016 as well, the market has been heavily stocked, putting pressure on domestic prices. Thus, the average prices for wheat of the fourth class in the European part of Russia in the first half of the season decreased to the lowest level since the 2014/15 season. However, in the second half of the season, grain prices were actively rising, largely due to record export rates.
Grain export
According to a preliminary assessment analytical center « Rusagrotrans”, grain exports from Russia in the 2017/18 season amounted to a record 53.3 million tons against 35.5 million tons in the 2016/17 agricultural year. And taking into account legumes (1.36 million tons), flour (0.35 million tons) and exports to the EAEU countries (0.98 million tons), the total volume of supplies abroad is estimated at almost 56 million tons against 37 million tons a year earlier.
On average, about 4.44 million tons of main grain crops were exported monthly, while in 2016/17 this figure was about 3 million tons. Five times - in September, November, December, March and April - it was reached and exceeded the level of 5 million tons. The largest volume was shipped to foreign markets in November - more than 5.5 million tons.
According to the results of the 2017/18 season, the export of wheat, the main Russian export agricultural crop, reached 41.07 million tons. This is 14.1 million tons more than in the previous agricultural year. With this indicator, Russia became the world's largest wheat exporter for the second time in history. The second place this season was taken by the EU with 24 million tons (USDA forecast). For the whole season, 6.2 million tons of barley were delivered abroad (plus 3.4 million tons compared to the volume of 2016/17), corn - 5.7 million tons (plus 0.46 million tons). These are also record levels for Russia.
Such a high export became possible for several reasons. Firstly, this was facilitated by a record harvest of wheat (85.9 million tons), as well as high yields of barley (20.6 million tons - the maximum since 2008) and corn (13.2 million tons, the second figure after the record 2016, when 15.3 million tons were harvested). Secondly, the introduction by the government of a preferential tariff for the transportation of grain by rail from a number of regions remote from ports in Central Russia, the Volga region, the Urals and Siberia. Thirdly, the increase in export prices for Russian wheat, which since February 2018 has been trading at more than $200/t — such levels have been recorded for the first time since 2015. Fourthly, the export infrastructure, which turned out to be able to export over 5 million tons of grain per month.
By sea
The 2017/18 season was marked by records for grain transshipment in all directions. In particular, through the ports of Novorossiysk, Tuapse, Kavkaz (where volumes go from small ports to offshore transshipment), small ports, as well as the ports of the Baltic and Caspian. The largest volume was sent abroad through Novorossiysk grain terminals - 18.2 million tons against 12.2 million tons a year earlier. The small ports of the Azov-Black Sea basin in total shipped almost 16 million tons against 10.7 million tons in 2016/17. The Caucasus significantly increased transshipment - up to 5.2 million tons against 3 million tons in the previous agricultural year. At the same time, in fact, about 11.8 million tons will be exported through this port during the season, since most of the volume exported through it passes customs in small ports. The port of Tuapse increased shipments by 55% to 2.5 million tons, by 19% to 3.9 million tons - Taman. The Russian Baltic ports increased transshipment from 882 thousand tons to 971 thousand tons, and the Baltic ports — from 666 thousand tons to 1.7 million tons. The total export of grain through all Russian ports in 2017/18 agricultural year amounted to about 50.6 million tons against 32.7 million tons in 2016/17.
The total capacity of Russian ports, according to " Rusagrotrans”, in the completed agricultural year amounted to about 55 million tons. Over the next five years, due to ongoing projects in the South, North-West, Far East, it can increase by at least 30 million tons. In particular, the implementation of the OTEKO project is expected in the South in the port of Taman with a transshipment capacity of 12.5 million tons of grain and 2 million tons of other agricultural cargo. It will continue modernization with an increase in transshipment from 7 million tons to 10 million tons. The project of the AZTK terminal has been announced for implementation ( TD "Rif") in the city of Azov. It is planned to build it from 2020 to 2022. In the North-West for 2021-2022, it is planned to build a terminal of the Novotrans Group of Companies in the port of Ust-Luga with a capacity of up to 6 million tons of grain and a terminal for the export of other agricultural goods (meal/cake, beet pulp, etc.). Most likely, a significant part of the volumes of grain and other agricultural cargoes going through the ports of the Baltic States (more than 3 million tons) will be redirected there. The commissioning of the project of the co-owner of the Factor forest terminal in Primorsk (Leningrad Region), designed for transshipment of 2 million tons of grain, is scheduled for 2022. And in the Far East, it is planned to implement the project "Far Eastern Grain Terminal" in the port of Zarubino (" OZK”) with a transshipment capacity of up to 33.5 million tons for the purpose of exporting and transiting Chinese grain from the northeastern provinces of China to the southern ones. The deadline for commissioning the first stage with a capacity of 3 million tons is 2021, the second stage for 10 million tons is 2023.
And by rail
During the 2017/18 season, export shipments of grain by rail also increased. So, from October 2017 to January 2018, they amounted to about 1.7 million tons per month against 1.1-1.5 million tons in previous years, and by March-April of this year, more than 1, 9 million tons monthly. The peak was recorded in April - 1.94 million tons, while a year earlier, only 986 thousand tons were transported this month. In general, a historically record volume of 19 million tons was sent for export by rail. This is more than last year's result 1.76 times.
In the regional context, the railway also showed records. All regions of the country, with the exception of the South of Russia (North Caucasian railway), delivered the highest volumes of grain for export in history. In July-May 2017/18, the Volga region shipped 4.5 million tons of grain by rail (3.4 times more than the same period in 2016/17), the Central Chernozem region - 6.1 million tons (a two-fold increase), Siberia - 1.2 million tons (six times), Ural - 642 thousand tons (four times).
The share of the southern regions in export rail transportation continues to decline, amounting to only 8% in May 2018 against 61% at the beginning of the completed season. In the second half of the agricultural year, shipments from the Volga region and the Center prevailed, their share increased to 37% for each region (from 21% and 26% in September 2017, respectively). Deliveries from Siberia and the Urals increased throughout the season.
Record shipments for export by rail in July-May of the 2017/18 season were made from all grain-producing regions, including Volgograd (1.8 million tons against 679 thousand tons a year earlier), Saratov (1.69 million tons against 462 thousand tons), Kursk (1.33 million tons against 562 thousand tons), Tambov (1.16 million tons against 492 thousand tons) and others. And even from points remote from ports - Orenburg (494 thousand tons against 115 thousand tons in July-May 2016/17), Omsk (396 thousand tons against 117 thousand tons) and Novosibirsk (310 thousand tons against 9 thousand .m) areas. All these regions, with the exception of the Volgograd region, received subsidies to compensate for losses in the transportation of grain cargo by rail, which was an additional incentive for the growth of supplies.
However, against the background of active export from the Volga region and the Shipping Center for export from Stavropol and the Krasnodar Territory, it is noticeably lower than previous seasons - 2.67 million tons for 11 months of 2017/18 against 3.16 million tons for the same period in 2016/17 and 1.36 million tons against 1.7 million tons, respectively.
In general, the increase in Russian grain exports from 35.5 million tons to 53.3 million tons by 45% will be provided by the railway.
Import demand will decrease by 1.5 million tons
Svetlana Malysh, Analyst of agricultural markets in the Black Sea region Thomson Reuters
According to our forecast, grain exports from Russia in the 2017/18 season amounted to 51-51.5 million tons, including 39-39.5 million tons of wheat, almost 6 million tons of barley and about 5.5 million tons of corn. In recent years, Russian wheat has been in demand on the world market in terms of price-quality ratio, which is confirmed by record export shipments.
The high demand for Russian grain in the sales markets is crowding out previously traditional suppliers such as the USA, Europe and Australia. Moreover, the events taking place in Russia and in the Black Sea region as a whole often began to influence the global price environment, the main indicator of which can be considered futures prices on the Chicago Stock Exchange. The launch of futures contracts for Black Sea wheat on the Chicago Stock Exchange, as well as price indicators from various world agencies that reflect the real situation at the regional level, only emphasizes the importance of the Black Sea region for the global grain market. After all, in total, the countries of this zone, including Russia and Ukraine, supplied more than 30% of wheat to the world market in 2017/18 agricultural year.
In the new season, Thomson Reuters does not predict significant changes in the structure of grain exports from Russia. Wheat with 12.5% protein remains the main export item, which has actually already become a kind of brand on the world market. As regards the expected market conditions in the main buying countries of Russian grain, the import demand of the main consumers in the 2018/19 agricultural year will decrease by 1.4-1.5 million tons. However, a possible decrease in external demand for the main grain crops of Russian origin will be offset by a decrease in export potential.
Who buys
The rating of the largest buyers of Russian grain for the third consecutive season was headed by Egypt. In July-May, the country imported more than 8.6 million tons, increasing volumes by 30.3% compared to last year. This is a record figure. Turkey's purchases look even more impressive, primarily in terms of growth rates. It increased the import of Russian grain by 131% to 7.1 million tons, and this is the second place in the top. It should be noted that shipments to Turkey go mainly through small ports. Less than 14% was sent there through deep-water terminals in 11 months of the 2017/18 agricultural year. The third largest buyer this year is Iran, the country has increased imports by more than 57% to 2.46 million tons. Russia carries out shipments to this country mainly through the ports of the Caspian Sea. Bangladesh, which occupied the third position in July-May in the 2016/17 season, dropped to the seventh line in the past agricultural year. The state is one of the few who, albeit slightly, reduced purchases compared to the same period a year earlier - by 2.1% to 1.9 million tons.
Saudi Arabia is in fourth place in the 2017/18 season - up 80.8% compared to last year's volumes - 2.1 million tons. The top 5 importers are closed by Vietnam, which increased imports by 183.5% to 2.1 million tons. Sudan also showed good dynamics in the current season - plus 136% to 1.97 million tons. Lebanon and Nigeria, located in eighth and ninth positions, increased purchases of Russian grain by 32% and 23.2%, respectively, to 1.57 million tons and 1.51 million tons. Indonesia, which closes the list of ten largest buyers, increased imports by 4.2 times from 330 thousand tons to 1.39 million tons.
Latvia also showed a good increase in July-May 2017/18 (through its ports grain was exported to third countries) - three times to 1.15 million tons, the UAE doubled its volumes - up to 12.2 million tons, 2.2 times Mexico — up to 704 thousand tons, 2.3 times Jordan — up to 589 thousand tons, 5.6 times Qatar — up to 293 thousand tons, 28 times Philippines — up to 421 thousand tons. A new significant buyer of Russian grain was Venezuela, which purchased 384 thousand tons since the beginning of the season.
There were also those who reduced volumes. Azerbaijan, which imports Russian grain by rail, imported 6.4% less in July-May 2017/18 - 1.2 million tons (11th position). Libya more than halved imports - from 709 to 345 thousand tons, 1.7 times to 462 thousand tons - Morocco.
In total, the top 30 largest buyer countries in the season ended imported more than 45 million tons of Russian grain. And this is more than 90% of the total export volume.
Who sells
Thirty largest exporters of the country sent abroad 78% of all grain exported from Russia in July-May of the 2017/18 season. The leader of the rating, as well as in the list of importers, has not changed either. For the fourth season in a row it is headed by Rostov TD "Rif". The company exported almost 61% more than in the same period of the 2016/17 season - 6.7 million tons, which is almost 13.5% of the total volume of Russian exports. In second place, also traditionally, " Glencore”, which increased export by 62.7% to 5.04 million tons. The company's share is about 10%. To the third position from the fourth in 2016/17 agricultural year rose " Aston". Its export volumes increased by 45% to 3.2 million tons. Cargill' is now on the fourth line. It slightly slowed down shipments (-4.5%), delivering 2.57 million tons abroad. At the end of the top 5 - " Louis Dreyfus»: 2.3 million tons, or plus 34.1% of last year's volumes.
Each of the participants in the rating from 5th to 11th place exported more than 1 million tons in 11 months of the 2017/18 season. A year earlier, there were nine companies that crossed this milestone. The sixth position of the top is occupied by Zerno-Trade, which increased exports by 1.5 times to 2.3 million tons. The seventh place is taken by MiroGroup: 1.95 million tons, which is 13.8% more than a year earlier. Eighth - " KZP-Expo" - 1.8 million tons (plus almost 34%), the ninth - " Artis-Agro" with volumes of 1.7 million tons (plus 82%). Closing the top ten largest exporters " OZK” this season increased its export by almost 2.5 times to 1.45 million tons. And located in 11th place “ Outspan» sent 1.35 million tons to foreign markets, increasing shipments by 41.7%.
Among those who have significantly increased export volumes are “ South of Russia and GarantLogistik. Both companies tripled exports in July-May to 894 thousand tons and 684 thousand tons, respectively. Shipped 2.6 times more grain " Agromarket"(374 thousand tons), added the same amount Agroholding "Steppe"(362 thousand tons). Agronefteprodukt (342,000 tons) and Trade House Olinsky (256,000 tons) have doubled supplies, and Daylesford Merchant (226,000 tons) has expanded its supplies eight times. Two new players also made it into the top 30 this season: Center Rus, which is in 24th place with a volume of 300 thousand tons (the company did not act as an exporter in the 2016/17 season), and “ Prodimex” — 28th position with 253 thousand tons (for the same period a year earlier, the holding exported only 6 thousand tons).
However, there are those in the top 30 who have reduced exports. A significant decline in shipments was observed at the South Center (YSC) - from 1.49 million tons for 11 months of 2016/17 to 597 thousand tons for the same period in the season ended. With such volumes, the company dropped from seventh to 15th place. KOFCO Agri also lost several positions, reducing exports by 20% to 567 thousand tons, and this is the 16th line in the rating. Globex Grain also shipped 48.5% less. In July-May, it exported 254 thousand tons, which is almost half as much as a year earlier.
Prospects-2018/19
The weather conditions for the formation of the 2018 harvest are worse than last season. In recent weeks, the drought in the South has intensified, dry weather is also observed in the Center. In Siberia, a high backlog of sowing remains (-2 million hectares compared to the last season as of June 9). However, due to the favorable winter and good conditions in the spring, a critical reduction in the collection is not yet expected. In the new season, exports will also probably be significant. Continued subsidies for transportation could support exports, if such a decision is made. Ministry of Agriculture proposes to introduce a preferential tariff for the transportation of grain with a total volume of 1 million tons from the Orenburg, Kurgan, Novosibirsk, Omsk regions and the Krasnoyarsk Territory.
The forecast for the harvesting area of winter grains in Russia for the 2018 harvest is 16.4 million hectares (16.8 million hectares in 2017), spring - 30.4 million hectares (30.9 million hectares). Based on this, the total harvest of grain and leguminous crops can be about 120 million tons (135.4 million tons last year). Including wheat harvest is preliminary estimated at 73.5 million tons (85.9 million tons in 2017), barley - 18.4 million tons (20.6 million tons), corn - 14.4 million tons (13. 2 million tons).
The main uncertainty factors for the forecast of the new crop are the consequences of the drought in the South and the delay in spring sowing in Siberia. The estimated grain harvest in the Southern Federal District is approximately 32.3 million tons (35.8 million tons in 2017), in the Siberian Federal District - 11.8 million tons (15.8 million tons). The agrarians of the center can produce about 30.3 million tons of grain (31.9 million tons in 2017), in the Volga region - 25.9 million tons (30.6 million tons).
Grain stocks by the end of the 2017/18 season, due to extremely high exports, turned out to be less than previously predicted. But they will still reach a record level of 20 million tons against 18.8 million tons at the end of the 2016/17 agricultural year. On the free market, according to " Rusagrotrans”, will remain up to 16.2 million tons against 14.8 million tons a year earlier, in the state intervention fund - another 3.8 million tons against 4 million tons at the end of the previous season. According to the data Rosstat As of May 1, grain stocks were about 26.8 million tons, which is 12.6% more than a year ago.
The price for a new wheat crop this year is formed at $205/t FOB against $184/t in 2017. And the calculation of domestic prices based on FOB quotes shows that their level in August 2018 may be higher than at the beginning of the 2017/18 season. Thus, wheat of the fourth class with a protein of 12.5% without VAT in the Saratov region can cost about 7.2 thousand rubles / t (a year earlier - 6.75 thousand rubles / t), and in the Krasnodar Territory - 8, 45 thousand rubles/t (8.1 thousand rubles/t).
The author is the head of the analytical center "Rusagrotrans
". Aleksey Egorov, a specialist of the center, participated in the preparation of the article. The article was written specifically for Agroinvestor.
Need to invest in infrastructure development
Evgeny Sidyukov, General Director of Krasnodarzernoprodukt-Expo (KZP-Expo)
In the 2017/18 season, we exported 2 million tons of grain, which is 400 thousand tons more than in 2016/17. The subsidy program contributed to the growth of shipments to foreign markets rail transport grain for export from distant regions - thanks to it, exports from the Central Federal District and Siberia increased.
It is worth recognizing that the level of export prices for grain for agricultural producers in the completed agricultural year was low. But for us profitability export operations remained the same as in the previous season. At the same time, part of the risks, including non-reimbursement of VAT, short delivery of goods, has disappeared. Today we work directly with farmers, conclude an agreement, and they have no chance of violating their obligations under it. Deliveries were carried out in a timely manner and in the volumes specified in the contracts.
However, there were also factors that had a negative impact on traders. In particular, the volatility of the currency and the lack of transshipment capacities in Russia. Therefore, we can say that investing in infrastructure is one of the primary tasks. Our company also has certain “investment relationships” with ports. We are developing joint programs for the construction of facilities for receiving and shipping.
In the coming agricultural year, we expect export volumes and margins to remain unchanged. However, there are fears that the year will be lean, and then, accordingly, grain shipments abroad will decrease.
The sown area under wheat in our country remains high every year. However, the yield of this indispensable cereal crop, and hence its cost, is highly dependent on weather conditions.
Use of wheat
The main field of activity in which wheat is used is the manufacture of flour, which is intended for baking bread, pasta, and a wide variety of confectionery products. In addition, it is successfully used for the following purposes:
production of popular alcoholic beverages - vodka and beer;
production of combined animal feed. Also, wheat is a plant grain and hay can be used as an independent feed product on livestock farms and poultry plants;
production of ointments and powders, starch bandages in medicine. Wheat germ extract is also an excellent remedy for burns, used to heal wounds;
cosmetology. Wheat and cosmetic products from it are a well-known anti-aging agent.
In addition to all this, wheat is an export product.
Growing wheat in Russia
The Russian wheat market is formed by the following regions that grow the largest volumes of crops:
Southern Federal District. Its share today is 27 percent;
Central Federal District - 22 percent;
The Siberian Federal District, whose share in total production is increasing every year. The growth is mainly provided by the Omsk Region and the Altai Territory.
Also, constantly increasing volumes of crops are grown in the Volga, Urals, North Caucasian and North-Western federal districts.
Export and import of wheat
Export of wheat today is about 15 million tons. According to this indicator, it ranks ninth among the most important products shipped abroad. The main directions are Egypt and Turkey, Azerbaijan and Iran, as well as Yemen, Israel, Libya and Iraq. Russian wheat is also exported to Georgia. Every year, the main volumes of exports are shipped in just three months - from July to September.
In Russia, the product is grown in sufficient quantities to meet their own needs, so wheat is practically not imported. The only exceptions are lean years, when the available volumes become insufficient.
The cost of wheat
It also depends only on the crop. For example, after harvesting an insufficient amount of product in 2012, by January of the following year, wheat rose sharply in price. But already in July, the cost of the product returned to its usual indicators. Prices also vary somewhat in the regions of Russia, depending on the quality and variety.