June 24 2004, 11:02 Interfax

Russia will increase its grain export potential in 2004/05 MY - Russian analysts

Russia, which has decreased its foreign sales of grain in this marketing year (June 2003 to July 2004), might strengthen its positions on the world grain market in the new season - this was the opinion of the participants of the "Fifth Grain Round", which is currently underway in the Black Sea resort town of Sochi, Interfax news agency reported with reference to the press agency of Russian Grain Union.

According to the Analyst of the company WJ InterAgro Vladimir Petrichenko, in the new grain year Russia will be able to sell abroad 8 million tonnes of grain.

In the MY 2002/03 Russia exported about 17 million tonnes of grain, but in this season, according to experts' opinion, the foreign sales will drop to 7.3 million tonnes.

Petrichenko attributes the expected growth in exports with an increase in the total grain crop. He forecasts that the average grain yield will increase to 1.71 tonne per hectare from 1.6 tonne per hectare last year. This will result in the total grain crop at the level of 76.1 million tonnes (according to an optimistic forecast - up to 80 million tonnes) against 67.2 million tonnes in 2003.

Wheat crop is forecast at the level of 42.3 million tonnes (in 2003 - 34.1 million tonnes), barley crop - 18.6 million tonnes (18 million tonnes).

Petrichenko forecasts the carryover stocks as of July 1, 2004 to be at the level of 6.7 million tonnes (not including seeds).

The participants of the Grain Round noted that Russia's farming economy was currently rather deeply integrated into the world grain market. This, in particular, was proved by the fact that in the 2003/04 the Russian regional markets, especially - the market of southern regions, has experienced a hard dependence on the world grain market situation.

According to the forecasts of General Director of the Institute for Agrarian Market Situation (IKAR) Dmitry Rylko, export of grains from Russia in this marketing year will make 7.3 million tonnes, the import - about 2.4 million tonnes.

At the same time, Rylko believes that "as of today the activities of export companies are not completely regulated: southern grain goes to export, while the total grain balance has not been formed yet".

Meanwhile, according to the President of company Novoye Sodruzhestvo Konstantin Babkin (the company owns controlling stocks of Russia's largest grain harvester manufacturing works Rostselmash), the positive trends on the Russian grain market are testified by the fact that "the demand for the harvesters in 2003 increased 40 percent from the previous year, which proves that Russian grain producers want new high quality farming equipment".

And the President of Russian Grain Union Arkady Zlochevsky said that "in order to secure the positive results and to continue development of the market now it is urgent to develop domestic grain consumption, in particular - on account of livestock breeding industry, to make arrangements for efficient sales of the produce, to develop logistic schemes and, naturally, to increase the exports".

The Grain Round, organised by Russian Grain Union, is an annual grain industry forum, gathering the leading players on the Russian grain market, experts, representatives of power authorities.