Russia's slow grain exports raise doubts over 2016-17 forecast: SovEcon

Russia's grain exports remain slow so far for the marketing year which began on July 1, the SovEcon agriculture consultancy said on Monday, raising doubts about whether SovEcon's full-year forecast for 2016/17 will be met. The world's leading wheat exporter needs to raise 2016/17 grain exports by 5 million tonnes from the previous season to achieve SovEcon's forecast of 39 million tonnes and to avoid the record 2016 crop putting downwards pressure on domestic prices.
However, this aim "is becoming more difficult, if reachable at all", Andrey Sizov, the head of SovEcon, a leading agriculture consultancy in Moscow, said in a note. He sees Russia's November grain exports at 3.5 million tonnes, including 2.6-2.7 million tonnes of wheat. That would leave Russia's July-November grain exports below the same period a year ago.
Russia's October grain exports fell to 2.9 million tonnes from 4.5 million tonnes in September and were significantly lower than SovEcon had originally expected due to stormy weather in sea ports. As a result, farmers have increased their grain stocks in the Volgograd region by 28 percent as of November 1. The Stavropol and Rostov regions raised their stocks by 19 percent and 17 percent respectively, while stocks in the Krasnodar region were down 1 percent year-on-year.
"It means a higher exportable surplus in (Russia's) south. On the other hand, it limits demand from exporters for grain from regions which are farther from ports," Sizov said. At the same time, prices in the Russian domestic grain market continue to rise despite relatively weak exports because farmers are holding back their higher-quality wheat and the government continues its state restocking programme with domestic purchases, SovEcon said.