Russia faces lower wheat exports in 2017-18

Russia, one of the world's largest wheat exporters, will have less grain to offer the global market in the 2017/18 marketing year due to less favourable weather than in 2016/17, when it enjoyed a record crop, SovEcon agriculture consultancy said. The country's grain crop would still be the second largest in its post-Soviet history. Together with stronger competition with French and Ukrainian supplies and high stocks from the previous record crop, the harvest is likely to pressure Russian grain prices at the start of the 2017/18 season, SovEcon added. The new marketing year starts on July 1.
SovEcon, a leading agricultural consultancy in Moscow, told a conference on Thursday that it had downgraded its forecast for Russia's 2017/18 grain crop to 109.5 million tonnes from the previously expected 112.5 million tonnes.
It sees Russia's 2017/18 grain exports at 34.5 million tonnes, down from 36.3 million tonnes this year. The downgrade of the crop forecast partly stems from the risk of a shortage of rain in Russia's southern regions in April-June, which, if realised, could hit the country's main producing area of winter grains. However, the level of soil moisture is good and would help to compensate for any lack of rain, SovEcon head Andrey Sizov told the conference. Russia harvested a record grain crop of 121 million tonnes in 2016.
SovEcon also said it forecast the country's wheat crop at 62.5 million tonnes in 2017 compared with 73.3 million tonnes in 2016. It sees wheat exports falling to 24.5 million tonnes in 2017/18 from 27 million tonnes in 2016/17. SovEcon said its forecast for wheat exports could be too optimistic as Russia's peers in the agriculture market - France and Ukraine - were also expected to harvest a good crop.
Russia's wheat export potential also depends on the volatile rouble currency rate against the dollar and on supplies to Turkey, the second-largest market for Russian wheat after Egypt, he added. Turkish buyers have put purchases of wheat, sunflower oil and maize from Russia on hold, despite denials from Ankara that it has effectively banned imports from Moscow, trade and industry sources said on Monday. On Wednesday, Moscow said Ankara's action against Russian suppliers was hindering the restoration of ties between the two countries.