Grain market. Basic Research

Description

From 2013 to 2017, the gross harvest of grain crops in Russia increased by 46.6%: from 92.4 to 135.4 million tons. Every year the indicator showed an increase relative to the previous period, a slight decrease was noted only in 2015 - by 0.5% . In the last two years (2016-2017), the country had record grain harvests - 120.7 and 135.4 million tons, respectively.

It is expected that at the end of 2018, the gross grain harvest will be 113.9 million tons - 15.8% less than in 2017. If we do not take into account the record figures of 2016-2017, then this harvest level is quite sufficient to satisfy domestic needs and export obligations of the country. In addition, by the end of 2017, significant grain reserves had accumulated in granaries, which should also reduce tensions in the market. At the beginning of October 2018, it became known that the Government of the Russian Federation allowed the sale of 1.5 million tons of grain (wheat, rye and feed barley) from the reserves of the intervention fund at exchange trading. As of August 17, 2018, the volume of grain in the federal intervention fund was 3.7 million tons worth 34.48 billion rubles.

Russia exports about 30% of all grain produced. From 2013 to 2017, its supplies abroad increased 2.2 times: from 19.9 to 43.3 million tons. At the same time, wheat was in greatest demand abroad, accounting for an average of 73.3% of grain exports. Over the same period of time, corn accounted for about 12.9% of Russian grain supplies, and barley accounted for 12.5%. In 2017, the main foreign buyer of grain of Russian origin was Egypt, whose share was 18.1% of the total. Turkey accounted for 11.6% of total exports, while Iran accounted for 5.0%.

In 2022, according to BusinesStat forecasts, the gross harvest of grain crops in Russia will be 137.9 million tons, and export supplies will be 45.4 million tons.

“Analysis of the grain crops market in Russia in 2013-2017, forecast for 2018-2022” includes the most important data necessary to understand the current market conditions and assess the prospects for its development:

  • Economic situation in Russia
  • Sown areas and grain yields
  • Gross harvest and producer prices
  • Consumption of grain crops by areas: industrial processing, industrial consumption (livestock feed and seed material), personal consumption, losses
  • Industrial processing in the following areas: feed products, flour and cereals, other processing
  • Sales and prices of grain crops
  • Balance of demand, supply, warehouse stocks of grain crops
  • Export and import of grain crops
  • Ratings of industry enterprises by financial indicators

The review provides detailed information on the types of grain crops:

  • Wheat
  • Barley
  • Corn
  • Buckwheat
  • Millet
  • Other grains

Data are provided for the largest enterprises in the industry: Agricultural association "Kuban", Avangard-Agro-Orel, JSC "Aurora", Agroholding Ivnyansky, Rostov grain company "Resurs", Kolkhoz-breeding plant "Kazminsky", Agrocomplex Rostov, Agrofirm "Zolotaya Niva", Delta-Agro, Pachelmskoe farm, Iskra , Maxim Gorky, Pristenskaya Grain Company, Volgograd Agro-Industrial Company, Agrosoyuz South of Rus', Dobrynya, Novator, Pobeda Agrofirm-breeding plant, Experimental production farm breeding plant "Leninsky Put", Rosagrotrade, etc.

BusinesStat prepares an overview of the global grain crops market, as well as reviews of the markets of the CIS, EU and individual countries of the world.

The review presents ratings of the largest importers and exporters of grain crops. Also presented is a rating of the largest foreign companies receiving Russian grain crops and a rating of the largest foreign suppliers of grain crops.

In preparing the review, official statistics were used:

  • Federal State Statistics Service of the Russian Federation
  • Ministry of Economic Development of the Russian Federation
  • Federal Customs Service of the Russian Federation
  • Federal Tax Service of the Russian Federation
  • EurAsEC Customs Union
  • world Trade organisation

Along with official statistics, the review presents the results of BusinesStat research:

  • Audit of grain trade
  • Agricultural Industry Experts Survey

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Content

METHODOLOGY FOR PREPARING MARKET REVIEWS IN RUSSIA

STATE OF THE RUSSIAN ECONOMY

Basic parameters of the Russian economy

  • Table 2. Real GDP and index of real physical volume of GDP, Russian Federation, 2013-2022 (trillion rubles, %)

Results of Russia's accession to the Customs Union

Results of Russia's accession to the WTO

Prospects for Russian business

CLASSIFICATION OF GRAIN CROPS

DEMAND AND SUPPLY OF GRAIN CROPS

Offer

Demand

Balance of supply and demand

DOMESTIC CONSUMPTION OF GRAIN CROPS

INDUSTRIAL PROCESSING OF GRAIN CROPS

SALES OF GRAIN CROPS

Natural sales volume

  • Table 29. Sales of grain crops by farm category, Russian Federation, 2013-2017 (million tons)
  • Table 31. Sales by type of grain crops, Russian Federation, 2013-2017 (million tons)
  • Table 32. Sales forecast by type of grain crops, Russian Federation, 2018-2022 (million tons)

Sales value

average price

Correlation between average price and inflation

The ratio of natural, value sales volume and average price

PRODUCTION OF GRAIN CROPS

Sown areas

Productivity

Gross collection

Manufacturer price

COMPANIES OF THE INDUSTRY

  • Table 70. Rating of industry enterprises by revenue from sales of products, Russian Federation, 2016 (million rubles)
  • Table 71. Rating of industry enterprises by profit from product sales, Russian Federation, 2016 (million rubles)
  • Table 72. Rating of industry enterprises by profitability of product sales, Russian Federation, 2016 (%)

EXPORT AND IMPORT OF GRAIN CROPS

Balance of exports and imports

Natural export volume

Export value

Export price

Natural volume of imports

Import value

Import price

EXTERNAL ECONOMIC INDICATORS OF ENTERPRISES

Natural volume

  • Table 105. Rating of grain exporters by export volume, Russian Federation, 2017 (t)
  • Table 106. Rating of foreign companies receiving Russian products by volume of supplies, 2017 (t)
  • Table 107. Rating of grain importers by import volume, Russian Federation, 2017 (t)
  • Table 108. Rating of foreign suppliers of products to the Russian market by volume of supplies, 2017 (t)

Value volume

  • Table 109. Rating of grain exporters by export volume, Russian Federation, 2017 (thousand dollars)
  • Table 110. Rating of foreign companies receiving Russian products by volume of supplies, 2017 (thousand dollars)
  • Table 111. Rating of importers of grain crops by import volume, Russian Federation, 2017 (thousand dollars)
  • Table 112. Rating of foreign suppliers of products to the Russian market by volume of supplies, 2017 (thousand dollars)

ECONOMIC INDICATORS OF THE INDUSTRY

Financial result of the industry

  • Table 113. Revenue (net) from sales of products, Russian Federation, 2013-2017 (billion rubles)
  • Table 114. Selling and administrative expenses, Russian Federation, 2013-2017 (billion rubles)
  • Table 115. Product cost, Russian Federation, 2013-2017 (billion rubles)
  • Table 116. Gross profit from sales of products, Russian Federation, 2013-2017 (billion rubles)

Economic efficiency of the industry

Industry investments

  • Table 118. Investments in the industry, Russian Federation, 2013-2017 (million rubles)

Industry workforce

PROFILES OF LEADING COMPANIES IN THE INDUSTRY

JSC "Agro association "Kuban"

  • Organization management

Avangard-Agro-Orel LLC

  • Organization registration details
  • Organization management
  • Balance sheet of an enterprise according to form No. 1
  • Profit and loss statement of the enterprise according to form No. 2
  • Main financial indicators of the enterprise

JSC APO Aurora

  • Organization registration details
  • Organization management
  • Subsidiaries of the organization
  • Major shareholders of the organization
  • Balance sheet of an enterprise according to form No. 1
  • Profit and loss statement of the enterprise according to form No. 2
  • Main financial indicators of the enterprise

LLC "Agroholding Ivnyansky"

  • Organization registration details
  • Organization management
  • Main participants of the organization
  • Balance sheet of an enterprise according to form No. 1
  • Profit and loss statement of the enterprise according to form No. 2
  • Main financial indicators of the enterprise

RZK Resurs LLC

  • Organization registration details
  • Organization management
  • Subsidiaries of the organization
  • Main participants of the organization
  • Balance sheet of an enterprise according to form No. 1
  • Profit and loss statement of the enterprise according to form No. 2
  • Main financial indicators of the enterprise

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Tables

Table 1. Nominal and real GDP, Russian Federation, 2013-2022 (trillion rubles)

Table 2. Real GDP and real GDP index, Russian Federation, 2013-2022 (trillion rubles, %)

Table 3. Investments in fixed capital from all sources of financing, Russian Federation, 2013-2022 (trillion rubles, %)

Table 4. Exports and imports, trade balance, Russian Federation, 2013-2022 (billion dollars)

Table 5. Average annual dollar to ruble exchange rate, Russian Federation, 2013-2022 (ruble per dollar, %)

Table 6. Consumer price index (inflation) and food price index, Russian Federation, 2013-2022 (% of the previous year)

Table 7. Population including migrants, Russian Federation, 2013-2022 (million people)

Table 8. Real disposable income of the population, Russian Federation, 2013-2022 (% of the previous year)

Table 9. Supply of grain crops, Russian Federation, 2013-2017 (million tons; %)

Table 10. Forecast of supply of grain crops, Russian Federation, 2018-2022 (million tons; %)

Table 11. Production, import and warehouse stocks of grain crops at the beginning of the year, Russian Federation, 2013-2017 (million tons)

Table 12. Forecast of production, imports and warehouse stocks of grain crops at the beginning of the year, Russian Federation, 2018-2022 (million tons)

Table 13. Demand for grain crops, Russian Federation, 2013-2017 (million tons; %)

Table 14. Forecast of demand for grain crops, Russian Federation, 2018-2022 (million tons; %)

Table 15. Domestic consumption and export of grain crops, Russian Federation, 2013-2017 (million tons)

Table 16. Forecast of domestic consumption and export of grain crops, Russian Federation, 2018-2022 (million tons)

Table 17. Balance of demand and supply of grain crops, taking into account warehouse stocks at the end of the year, Russian Federation, 2013-2017 (million tons; %)

Table 18. Forecast of the balance of demand and supply of grain crops, taking into account warehouse stocks at the end of the year, Russian Federation, 2018-2022 (million tons; %)

Table 19. Consumption of grain crops, Russian Federation, 2013-2017 (million tons; %)

Table 20. Forecast of consumption of grain crops, Russian Federation, 2018-2022 (million tons; %)

Table 21. Consumption of grain crops by direction, Russian Federation, 2013-2017 (million tons)

Table 22. Forecast of consumption of grain crops by direction, Russian Federation, 2018-2022 (million tons)

Table 23. Industrial processing of grain crops, Russian Federation, 2013-2017 (million tons; %)

Table 24. Forecast of industrial processing of grain crops, Russian Federation, 2018-2022 (million tons; %)

Table 25. Industrial processing of grain crops by area, Russian Federation, 2013-2017 (million tons)

Table 26. Forecast of industrial processing of grain crops by area, Russian Federation, 2018-2022 (million tons)

Table 27. Sales of grain crops, Russian Federation, 2013-2017 (million tons; %)

Table 28. Forecast of sales of grain crops, Russian Federation, 2018-2022 (million tons; %)

Table 30. Forecast of sales of grain crops by category of farms, Russian Federation, 2018-2022 (million tons)

Table 31. Sales by type of grain crops, Russian Federation, 2013-2017 (thousand tons)

Table 32. Sales forecast by type of grain crops, Russian Federation, 2018-2022 (thousand tons)

Table 33. Sales of grain crops, Russian Federation, 2013-2017 (billion rubles; %)

Table 34. Forecast of sales of grain crops, Russian Federation, 2018-2022 (billion rubles; %)

Table 35. Sales by type of grain crops, Russian Federation, 2013-2017 (billion rubles)

Table 36. Sales forecast by type of grain crops, Russian Federation, 2018-2022 (billion rubles)

Table 37. Average price of grain crops, Russian Federation, 2013-2017 (rubles per kg; %)

Table 38. Forecast of the average price of grain crops, Russian Federation, 2018-2022 (rubles per kg; %)

Table 39. Average price by type of grain crops, Russian Federation, 2013-2017 (rub per kg)

Table 40. Forecast of average prices by type of grain crops, Russian Federation, 2018-2022 (rub per kg)

Table 41. The ratio of the average price of grain crops and inflation, Russian Federation, 2013-2017 (%)

Table 42. Forecast of the ratio of the average price of grain crops and inflation, Russian Federation, 2018-2022 (%)

Table 43. The ratio of natural, value sales volume and average price of grain crops, Russian Federation, 2013-2017 (million tons; rubles per kg; billion rubles)

Table 44. Forecast of the ratio of natural, value sales volume and average price of grain crops, Russian Federation, 2018-2022 (million tons; rubles per kg; billion rubles)

Table 45. Sown areas of grain crops, Russian Federation, 2013-2017 (million hectares; %)

Table 46. Forecast of sown areas of grain crops, Russian Federation, 2018-2022 (million hectares; %)

Table 47. Sown areas of grain crops by category of farms, Russian Federation, 2013-2017 (thousand hectares)

Table 48. Forecast of sown areas of grain crops by category of farms, Russian Federation, 2018-2022 (thousand hectares)

Table 49. Cultivated area by type of grain crops, Russian Federation, 2013-2017 (thousand hectares)

Table 50. Forecast of sown areas by type of grain crops, Russian Federation, 2018-2022 (thousand hectares)

Table 51. Sown areas of grain crops by regions of the Russian Federation, 2013-2017 (thousand hectares)

Table 52. Productivity of grain crops, Russian Federation, 2013-2017 (c/ha; %)

Table 53. Forecast of grain crop yields, Russian Federation, 2018-2022 (c/ha; %)

Table 54. Productivity of grain crops by category of farms, Russian Federation, 2013-2017 (c/ha)

Table 55. Forecast of grain crop yields by farm category, Russian Federation, 2018-2022 (c/ha)

Table 56. Productivity by type of grain crops, Russian Federation, 2013-2017 (c/ha)

Table 57. Yield forecast by type of grain crops, Russian Federation, 2018-2022 (c/ha)

Table 58. Grain yield by regions of the Russian Federation, 2013-2017 (c/ha)

Table 59. Gross harvest of grain crops in Russia, 2013-2017 (million tons; %)

Table 60. Forecast of gross grain harvest in Russia, 2018-2022 (million tons; %)

Table 61. Gross harvest by type of farm, Russian Federation, 2013-2017 (thousand tons)

Table 62. Forecast of gross harvest by type of farm, Russian Federation, 2018-2022 (thousand tons)

Table 63. Gross yield by type of grain crops, Russian Federation, 2013-2017 (thousand tons)

Table 64. Forecast of gross harvest by type of grain crops, Russian Federation, 2018-2022 (thousand tons)

Table 65. Gross harvest of grain crops by regions of the Russian Federation, 2013-2017 (thousand quintals)

Table 66. Producer price of grain crops, Russian Federation, 2013-2017 (rubles per kg; %)

Table 67. Forecast of producer prices for grain crops, Russian Federation, 2018-2022 (rubles per kg; %)

Table 68. Producer price by type of grain crops, Russian Federation, 2013-2017 (rub per kg)

Table 69. Forecast of producer prices by type of grain crops, Russian Federation, 2018-2022 (rub per kg)

Table 73. Balance of export and import of grain crops, Russian Federation, 2013-2017 (million tons)

Table 74. Forecast of the balance of exports and imports of grain crops, Russian Federation, 2018-2022 (million tons)

Table 75. Export of grain crops, Russian Federation, 2013-2017 (million tons; %)

Table 76. Forecast of exports of grain crops, Russian Federation, 2018-2022 (million tons; %)

Table 77. Exports by type of grain crops, Russian Federation, 2013-2017 (thousand tons)

Table 78. Export forecast by type of grain crops, Russian Federation, 2018-2022 (thousand tons)

Table 79. Export of grain crops by country of the world, Russian Federation, 2013-2017 (t)

Table 80. Export of grain crops, Russian Federation, 2013-2017 (billion dollars; %)

Table 81. Forecast of exports of grain crops, Russian Federation, 2018-2022 (billion dollars; %)

Table 82. Exports by type of grain crops, Russian Federation, 2013-2017 (million dollars)

Table 83. Export forecast by type of grain crops, Russian Federation, 2018-2022 (millions of dollars)

Table 84. Export of grain crops by country of the world, Russian Federation, 2013-2017 (thousand dollars)

Table 85. Export price of grain crops, Russian Federation, 2013-2017 (dollars per kg; %)

Table 86. Forecast of export price of grain crops, Russian Federation, 2018-2022 (dollars per kg; %)

Table 87. Export price by type of grain crops, Russian Federation, 2013-2017 (dollars per kg)

Table 88. Forecast of export prices by type of grain crops, Russian Federation, 2018-2022 (dollars per kg)

Table 89. Price of export of grain crops by country of the world, Russian Federation, 2013-2017 (dollars per kg)

Table 90. Import of grain crops, Russian Federation, 2013-2017 (million tons; %)

Table 91. Forecast of imports of grain crops, Russian Federation, 2018-2022 (million tons; %)

Table 92. Imports by type of grain crops, Russian Federation, 2013-2017 (thousand tons)

Table 93. Forecast of imports by type of grain crops, Russian Federation, 2018-2022 (thousand tons)

Table 94. Import of grain crops by country of the world, Russian Federation, 2013-2017 (t)

Table 95. Import of grain crops, Russian Federation, 2013-2017 (million dollars; %)

Table 96. Forecast of imports of grain crops, Russian Federation, 2018-2022 (million dollars; %)

Table 97. Imports by type of grain crops, Russian Federation, 2013-2017 (millions of dollars)

Table 98. Forecast of imports by type of grain crops, Russian Federation, 2018-2022 (millions of dollars)

Table 99. Import of grain crops by country of the world, Russian Federation, 2013-2017 (thousand dollars)

Table 100. Import price of grain crops, Russian Federation, 2013-2017 (dollars per kg; %)

Table 101. Forecast of import prices of grain crops, Russian Federation, 2018-2022 (dollars per kg; %)

Table 102. Import price by type of grain crops, Russian Federation, 2013-2017 (dollars per kg)

Table 103. Forecast of import prices by type of grain crops, Russian Federation, 2018-2022 (dollars per kg)

Table 104. Import price of grain crops by country of the world, Russian Federation, 2013-2017 (dollars per kg)

Table 113. Revenue (net) from sales of products, Russian Federation, 2013-2017 (billion rubles; %)

Table 114. Selling and administrative expenses, Russian Federation, 2013-2017 (billion rubles; %)

Table 115. Product cost, Russian Federation, 2013-2017 (billion rubles; %)

Table 116. Gross profit from sales of products, Russian Federation, 2013-2017 (billion rubles; %)

Table 117. Economic efficiency of the industry, Russian Federation, 2013-2017 (%; times; days days)

Table 118. Investments in the industry, Russian Federation, 2013-2017 (billion rubles)

Table 119. Labor resources of the industry, Russian Federation, 2013-2017 (thousand people; billion rubles; thousand rubles per year)

Apparent grain consumption in the Russian Federation is currently showing positive growth dynamics. In 2017, the volume amounted to 88.1 million tons, which is 4.5% higher than the level of 2016.

Grain production in the Russian Federation exceeds domestic consumption and is export-oriented; The Russian Federation is one of the three leaders in grain exports on the world market. According to a study by the website Ssia, Russian enterprises provide 99% of the grain market in the country, and about a third of all produced products are exported. The main buyers of Russian grain are traditionally Egypt and Turkey, which together account for about 30% of exports from the Russian Federation in physical terms.

Grain production is concentrated mainly in the Southern, Central and Volga Federal Districts, where the main grain producing regions are located.

Apparent grain consumption

Grain consumption has a fairly stable upward trend with the exception of 2015, when there was a decline in market volumes of -1.3% y/y, which was due to a decrease in grain production volumes (-0.6% y/y) and a reduction in the volume of supplies imported from -abroad grain types, in particular, rice and wheat from Kazakhstan. The reason for this was the increase in prices for imported products: the low exchange rate of the ruble had an impact on the rise in the cost of logistics, and therefore the costs of transporting grain became significantly higher. Since 2016, the grain market has shown positive growth dynamics: at the end of 2017, the market volume amounted to 88.1 million tons, which is 5% higher than the 2016 level.

Grain production in the Russian Federation is focused mainly on export - Russia occupies a leading position in the world grain market, in particular wheat, and therefore the volume of grain production by Russian enterprises is significantly higher than domestic consumption.

In the medium term, weak consumption growth is expected at an average annual rate of about 0.5%. The macroeconomic situation in the domestic and foreign markets remains difficult, but generally moderately favorable for the industry; The main factors for the growth of the domestic grain market may be the growth of the food industry and agriculture, including the livestock industry, against the backdrop of a recovery in consumer demand for grain processing products (flour, cereals), bakery products, as well as meat and dairy products. Administrative measures (reducing export subsidies for grain-producing regions) can also play a significant role in the dynamics of the development of domestic grain consumption. But since the effects of the above factors are long-term, a sharp increase in grain consumption is not expected in the coming years.

At the same time, there are a number of stop factors limiting the growth of grain consumption on the domestic market, among which are the demographic situation in the country (a projected decrease in the birth rate and migration growth), which will restrain the growth in demand for food products, and a reduction in the number of cattle dairy and meat and dairy breeds.

Volume of supply on the grain market in 2013-2018(O) and forecast until 2025, million tons (within the base development scenario)


Grain market structure: production, export, import, consumption

In 2017, grain production amounted to 130.6 million tons (+11.5% y/y). Volume of grain production in 2016-20177 showed stable positive growth dynamics associated with favorable weather conditions for high yields of the main grain crop - wheat (66% of grain production volumes).

In Russia, grain production, mainly wheat, is an export-oriented industry: about 33% of all products produced are exported. About a third of Russian grain exports go to Egypt and Turkey. Record grain harvests in recent years, mainly wheat, have made it possible to significantly increase grain exports abroad and expand the presence of Russian products on the world grain market.

Since 2013, the share of imported products on the market in the Russian Federation has decreased by more than 2 times; currently its share is less than 1%. Among imported products, the predominant types of grain are barley, mainly for the brewing industry, rice, as well as seed material (corn seeds, wheat, etc.).

Dynamics and structure of the grain market in 2013-2018(O) and forecast until 2025, million tons (within the base development scenario)


Consumption structure by federal districts

The grain produced is mainly used for the production of animal feed, flour, and also for feed consumption. In the structure of grain consumption by district, the leadership belongs to the Central and Volga Federal Districts with shares of 26.7% and 20.2% of the total market volume, respectively (in physical terms). This is followed by the Siberian (13.2%), Southern (11.2%), Northwestern (9.5%), Ural (8.4%), North Caucasian (6.7%) Federal District; the Far Eastern Federal District accounts for about 4.2%.

The structure of grain consumption in the Federal District is quite stable, and in the medium term, significant shifts in the regional structure of consumption are not expected.

Structure of grain consumption in the Federal District in 2013-2018(O), in physical terms

Grain market: Development forecast

Increasing the export potential of grain is currently limited by the insufficient development of transport and logistics infrastructure, as well as a shortage of elevator capacities. In the medium term, market growth is expected to slow down somewhat and average about 0.5% annually due to the absence of prerequisites for a sharp increase in demand for grain from the main consumers of the product. At the same time, the growth of grain production in the Russian Federation in the medium term is projected at about +2%.

In the ending 2016/17 agricultural year, Russia will supply 7 million tons of grain to Egypt, Vladimir Petrichenko predicts. “From July last year to May of this year, 6.677 million tons of grain were supplied to Egypt. In June, supplies were good. I think that by the end of the agricultural year we will approach 7 million tons.”, - said the expert. +

At the same time, he emphasized that “there has never been such a volume of Russian grain supplies to the Egyptian market.” In the last agricultural year, the Russian Federation exported 6.25 million tons of grain to Egypt compared to 3.65 million tons in the previous agricultural year.

V. Petrichenko associates such an increase in supplies with the competitiveness of Russian grain. "This season we had a more competitive price than our closest competitors in the Egyptian market - EU countries, - he said. - In addition, the Europeans had poor grain quality, but Russian exporters were able to maintain both prices and quality.".

V. Petrichenko noted that supply volumes were not affected by the situation with the “zero ergot” requirement, which arose from Egypt last summer and was canceled in September, since exporting countries refused to participate in Egyptian tenders. Reports that appeared at the beginning of June this year that Egypt once again intended to return to the “zero ergot” requirements have not yet been implemented in practice; shipments are proceeding in accordance with previous requirements.

The situation is affected by a decrease in inventories and an increase in world prices

Wholesale prices for rice cereals have increased by 5-6% over the past two weeks. As Vladimir Petrichenko, general director of the analytical company ProZerno, told Agroinvestor, from June 9 to June 16, a ton of first-grade rice cereal in the wholesale market increased in price by 800 rubles, and by June 23 - by another 1.1 thousand rubles. almost up to 30 thousand rubles.

“Now is the end of the season, and it is natural that price fluctuations occur against the backdrop of a slight decrease in stocks of the 2016 harvest. It should be borne in mind that rice prices during the season were at a fairly low level compared to previous years, both in the world and in Russia,” explains Petrichenko. According to him, prices increased in March-April: according to ProZerno, if by January 1 the wholesale price of rice cereal was 26.9 thousand rubles / ton - 25% lower than the level a year earlier, then by the end of March it increased by 9% to 29.4 thousand rubles/t.

“However, a new recession followed. Therefore, it is not surprising that prices may now adjust upward again. This is all the more natural given the weakening of the ruble, since rice is an international product that is quite strongly connected to the global market,” Petrichenko said. According to ProZerno, world prices for rice cereals have been on the rise since May - Thai rice (with 5% broken grains) now costs $438/t (FOB Bangkok).

The price is also affected by low stocks of high-quality raw materials this season, adds Irina Glazunova, Deputy General Director of the Institute for Agricultural Market Studies (IKAR). “As a result, cereal production may be lower than in the previous agricultural year. In addition, imports decreased slightly while exports increased. By the end of the 2016/17 cereal season, we will approach very low stocks of rice cereals,” she predicts.

As the Southern Rice Union previously reported, the dynamics of reduction in residues in the current agricultural year is higher than last year, which is due to the lower quality of grain this season. Prolonged rains in Kuban in the fall of 2016 led to a decrease in the volume of raw cereal yield from 65% last season to 55% this year. As of mid-June, the total balances of raw rice and cereals in raw terms amounted to 109.3 thousand tons compared to 187 thousand tons on the same date last year. “An additional impact on price growth in the future may be caused by a sharp increase in export quotations on the world market due to the active demand of large global importers. Rice imported into Russia has already begun to rise in price a little; in the future, this trend may become even more pronounced,” Glazunova predicts.

In general, the scenario for the development of the situation is reminiscent of 2015, when the price of rice cereals reached its maximum, exceeding 40 rubles/kg, notes the Southern Rice Union. “By mid-June 2015, the remaining rice had dropped to 100 thousand tons, and by September they were completely depleted. This year, the depletion of residues may occur by August, since the quality of the raw material is lower and the yield of cereals is less than in 2015. We assume that in the near future, rice prices will continue to increase, but the market will be balanced by imports, and by the time the new harvest is received, the price will stabilize,” a representative of the union commented to Agroinvestor.

Over the past seven years, rice production in the country has varied in the range of 1.05−1.1 million tons. In 2016, according to Rosstat, the gross harvest amounted to 1.08 million tons. According to the Ministry of Agriculture, in 2017, the area occupied by rice was decreased by approximately 10% compared to 2016 levels instead of the predicted growth. In particular, in the Krasnodar Territory, the main rice-producing region of the country, sowing amounted to 121.5 thousand hectares instead of the planned 140 thousand hectares. As the Southern Rice Union noted, the reduction in acreage is associated with a decrease in the profitability of rice farming against the backdrop of minimal prices for rice cereals that formed on the domestic market in the 2016/17 season.

This was announced by the head of the region's Ministry of Economic Development, Andrei Murga, in an interview with the Interfax-South agency. “We are planning to resume dialogue with Turkey. We want to invite investors to start processing grain in our region, and then sell it to the eastern market, where they have good connections,” said A. Murga.

He clarified that Turkey is ready to buy up to 70% of the grain harvest from the region, but since the partnership should bring benefits to Stavropol in the form of tax deductions, investors will be offered a grain processing project.

According to ICAR General Director Dmitry Rylko, the current forecast for the gross grain harvest is 111-116 million tons. “We are more optimistic than our ministry (the Ministry of Agriculture estimates the future harvest at 100-105 million tons – ed.)”, he noted.

The wheat harvest in the new agricultural year (from July 1, 2017 to June 30, 2018) is projected at 66-71 million tons, the expert added.

The work of one of the largest offshore transshipments in Russia, located in the neutral waters of the Kerch Strait, has actually ceased due to the increased frequency of inspections of river-sea vessels. According to the logistics company Glogos Project, control was strengthened after the death of the cargo ship Heroes of Arsenal, which sank on April 19 during transshipment in the neutral waters of the Kerch Strait. The ship was supposed to deliver a shipment of grain to Turkey.

“The sanctions of the port authorities, seeking to improve the safety of ship crews, almost immediately included most of the older ships in unsatisfactory technical condition flying foreign flags,” the statement says. At the same time, most of the ships that were prohibited from entering Russian ports as a result of the inspection turned out to be those operating in the roadstead of the Kerch Strait. In addition, port control services obligated shipowners to visa their stay in a foreign country.

As a result, part of the fleet was reoriented to the offshore transshipment of the port of Kavkaz - also located in the Kerch Strait, but on Russian territory. In January-May 2017, its cargo turnover increased by 45% compared to the same period in 2016 and amounted to 11.2 million tons. Including 3.3 million tons of export cargo were handled at the roadstead of the port of Kavkaz, which is 74% higher than the level January-May last year, and the volume of grain and grain processing increased 4.7 times to 2.3 million tons.

Road transshipment is used when sending cargo by river vessels from small ports, with subsequent transshipment to large-tonnage sea vessels. Offshore transshipment in Russia accounts for about 6-7 million tons of cargo per year, including Kerch - about 4 million tons, and the port of Kavkaz - about 3 million tons, Igor Pavensky, director of the strategic marketing department of the Rusagrotrans company, told Agroinvestor . And reorientation to the port of Kavkaz may lead to a certain increase in rates for offshore transshipment, since the capabilities of this port are limited. “In addition, a significant part of the released volume will go to deep-water ports, including Tuapse and Novorossiysk. Taking into account the fact that 95% of delivery to small ports of the Azov Sea and further to the roadstead is carried out by road, when the flow is reoriented to deep water, export volumes of transportation by rail will increase. Thus, deep-sea terminals will increase their load, especially at the beginning of the season - in August-October, when shipping through the roadstead is active,” predicts Pavensky.

In addition to the port of Kavkaz and deep-water ports, charterers can benefit from the cessation of offshore transshipment in Kerch, who will have an increased choice of fleet for freighting grain to Turkey, adds Konstantin Grinevich, general director of the Glogos Project. “In addition, the shipowners themselves, since there will be more cargo in the ports that needs to be transported to importing countries at completely different rates,” he noted.

Previously, the United Grain Company (UGC) has repeatedly opposed offshore grain transshipment in the neutral waters of the Kerch Strait. In May 2016, the acting general director of the UGC, Marat Shaidaev, addressed the Deputy Prime Minister and Chairman of the Maritime Board under the Russian government, Dmitry Rogozin, with a request to bring up the issue of offshore transshipment in Kerch for joint discussion. In the letter, he explained that an “illegal export scheme” had developed in the waters, and asked Rogozin to give the necessary instructions and develop measures to suppress such supplies, which pose “risks and direct losses” for Russia.
“Raid transshipment through small ports is carried out by vessels with a carrying capacity of 5-7 thousand tons, which pick up cargo under the pretext of direct export, and then often enter neutral waters and reload the grain onto a storage vessel of greater capacity. At the same time, the delivery is processed to Ukraine, but in fact the cargo goes for re-export,” explained UZK’s position to Agroinvestor, its first deputy general director Dmitry Yuryev. According to Andrey Sizov, head of the SovEkon analytical center, UGC's dissatisfaction is due to the fact that a significant part of grain transshipment occurs through “small ports” and not through large facilities, such as the port of Novorossiysk, part of which is owned by UGC itself or its shareholder - group "Sum".

Conditions of the world market of grains and leguminous crops: cash and futures markets from June 12 to June 16, 2017.

The nearest futures for wheat is 06/16/17. increased by 7.17 USD to 170.95 USD; later futures also showed growth during the reporting week. The main support for the market during the reporting week was provided by news about the state of wheat crops in the United States and partly in the Black Sea countries. Thus, according to USDA estimates, the condition of 45% of crops was assessed as good/excellent (a decrease of 10% over the week), although the market expected a less sharp reduction in assessments (about 2%). Naturally, this news became the reason for closing short positions on the stock exchange and stimulated the growth of quotes. However, it is worth noting that these concerns are a speculative reason for growth for the recently depressed wheat market, which is finding fewer and fewer optimistic reasons for strengthening. Export sales of wheat in the reporting week amounted to 624.448 thousand tons, which is 10.6% higher than last week.

The estimate of global wheat production in June was significantly adjusted downward for the 2017/18 season. This was quite natural, since many countries, having become convinced that the wheat market is clearly oversaturated, the terms of supply of wheat to many buyers are not always adequate, and the carry-over stocks of wheat (taking into account record production for several years in a row) are quite high, are trying to reorient the structure of sowing crops areas for more promising crops with more stable demand. Thus, the harvest forecast for 2017/18 MY amounted to 739.533 million tons, which is 14.568 million tons lower than the level of 16/17 MY.

The main adjustment affected the following countries: USA (-13.217 million tons; up to 49.642 million tons from 62.859 million tons in 2016/17), Australia (-10.0 million tons; up to 25.0 million tons from 35.0 million tons in 2016/17 MY), Russia (-3.529 million tons; up to 69.0 million tons from 72.529 million tons in 2016/17 MY), Canada (-3.35 million tons; up to 28.35 million tons from 31.7 million t in 2016/17 MY). The forecast for 2017/18 MY was increased in comparison with 2016/17 MY for India (+9.0 million tons; up to 96.0 million tons from 87.0 million tons), the EU (+5.283 million tons; up to 150.754 million tons from 145.471 million tons). The wheat market, as well as the soybean market, in 2017/18 MY is characterized by high carryover stocks for 2017/18 MY, which are also maximum in the new season (256.426 million tons versus 242.571 million tons in 2016/17 MY). The largest deviations in carryover stocks of wheat in the new season in comparison with the 2016/17 MY were noted for China (+13.75 million tons; up to 110.792 million tons from 97.042 million tons), for Russia (+5.529 million tons; up to 11.130 million tons from 5.601 million tons), for the USA (+5.053 million tons; up to 31.605 million tons from 26.552 million tons), for Australia (+3.19 million tons; up to 8.829 million tons from 5.639 million tons). Thus, in 2017/18 MY, about 43.2% of the new season’s carry-over reserves will be concentrated in China, 12.33% in the USA, 4.34% in Russia, 4.3% in the EU.

The estimate of world exports for 2017/18 MY was 178.55 million tons, which is 1.779 million tons lower than the level of 2016/17 MY. The reduction in forecast export estimates was mainly due to an increase in a decrease in exports from Australia (-5.0 million tons, from 24.0 million tons to 19.0 million tons), Ukraine (-3.3 million tons, from 17.8 million tons to 14.5 million tons) and the USA (-0.952 million tons, from 28.168 million tons to 27.216 million tons). The main exporters of wheat in the world in 2017/18 MY may be the EU (30.5 million tons or 17.08% of the world volume), Russia (29.0 million tons or 16.24%), the USA (27.216 million tons or 15 .24%).

For the USA, the forecast for wheat production for 2017/18 MY was adjusted towards a reduction in crop production from 62.859 million tons to 49.642 million tons. Due to the reduction in the volume of wheat production in the new season, ending stocks are also projected to decrease by 6.449 million tons.

European wheat market. At the end of the week, by June 16, 2017, the nearest wheat futures increased by 4.53 USD to 194.26 USD.

For EU countries, the forecast for wheat production, on the contrary, was increased for 2017/18 MY (+5.283 million tons). The estimate of carryover stocks of wheat for the new season was reduced by 4.529 million tons to 11.029 million tons (against 15.558 million tons for 2016/17 MY). The increase in the export forecast for the new season to 30.5 million tons (+3.5 million tons to 27.0 million tons in 2016/17 MY) led to the fact that the ending reserves forecast was reduced by 496.0 thousand tons in compared to last season.

The corn market declined during the reporting week. Thus, the decrease in the nearest futures amounted to 1.48 USD to 151.17 USD.


There are no messages in the feed yet

Grain and its processed products are one of the main types of food for the population of the entire globe and the basis of the country’s food security. The most stable demand for food products is for meat, grain and sugar.

The grain market is a multifactorial concept, including gross production, crop area, yield, domestic consumption in the country, the balance of supply and demand on the world market, the price of goods, logistics during sales and many other interrelated factors.

World grain production, depending on the year, fluctuates between 2.1-2.3 billion tons. The production of grain sufficient to supply the country is the basis of its food security. According to world food standards, safety is considered ensured if carry-over grain reserves in relation to the level of its consumption are at least 17%. The World Grains Council (JGC) estimates the global grain harvest for 2016-2017 at 2120 million tons. And despite the expected record global grain consumption, ending stocks will also be record and rising for the fourth year in a row.

In Fig. 1 shows the dynamics of gross harvests, yields and sown areas in Russia over the past 15 years. Analysis of the presented data shows that over the past five years, gross grain production has had a steady growth trend and is approaching 105-110 million tons, and in 2016. reached 120.7 million tons.

Figure 1 - Cultivated area

Cultivated areas have only begun to increase in recent years, and only slightly. Thus, over the past five years they have increased by 3 million hectares and reached 48 million hectares. However, this figure did not reach the level of sown areas sown with grain in 1990, when 63.0 million hectares were sown, and the gross harvest reached 120 million tons with an average yield of 19.5 c/ha.

The sown areas of the South of Russia are used almost completely, and the growth of gross harvests in the South is only due to an increase in average yield, which reaches 50 c/ha, with the average yield in Russia being 22-24 c/ha.
Based on the analysis of the given figures and forecast, it can be assumed that in the next 5 years, the gross grain harvest, taking into account the growth of sown areas and yields, can reach 120-125 million tons.

For comparison, Figure 2 shows information on grain yields in the main grain-producing countries for 2014, from which it can be seen that Russia is 2 times behind EU countries in terms of yields, and 2-4 times behind feed grains.


Figure 2 - Grain yield in the main grain-producing countries in 2014, c/ha

The structure of grain production by regions of Russia is presented in Fig. 3, from which it can be seen that 12 regions of Russia produce 60% of the gross grain harvest, and the regions located in the European part (10) are in almost the same climatic conditions with the EU, Canada and the main part of the USA, which confirms the potential for increasing yields in the Russian Federation.



Figure 3 - Main grain producing regions in the Russian Federation

For information, it should be noted that in Russia, with an annual production of mineral fertilizers in the amount of 20 million tons, only 2 million tons (10%) are used in Russia itself, and the rest are exported.
At the same time, in Russia an average of 34-45 kg/ha of fertilizers is applied per 1 ha, while in EU countries it is 300-350 kg/ha, i.e. 7-8 times more. Hence the conclusion regarding both yield and grain quality.

In the structure of world grain production, Russia ranks 4th after the USA, China and India (not counting the EU as a whole).

Due to the growth of the world's population, it is expected that the demand for grain will increase to 2.5 billion tons, and the potential for increasing grain production in Russia will be in demand.
If in past years, when analyzing the Russian grain market, it was believed that an increase in gross grain harvests, with a little changing volume of domestic consumption, Russia could increase the amount of exported grain, which in fact was the case, then from this year, taking into account the ever-increasing grain carryovers in the world and in For Russia in particular, the question of emerging difficulties in the sale of grain is looming. The grain market becomes overcrowded, grain surpluses appear, grain sales prices decrease and the grain producer’s profitability from growing grain decreases. The dynamics of the grain balance in Russia over the past 10 years are presented in Figure 4.


Figure 4 - Dynamics of grain balance in Russia

From the data in this figure it is clear that Russia, starting from 2010. completely self-sufficient in grain, and its carryover reserves at the beginning of the harvest did not fall below 17-20% of the volume of annual consumption within the country.
- Gross harvests are constantly (except for two lean years) increasing and have almost reached the level provided for by the Agricultural Development Program until 2020 - 115 million tons.
- Grain resources are constantly increasing and at this time are approaching 150 million tons.
- Domestic use increases very little and only reaches a maximum of 74 million tons.

The volumes and directions of grain use in Russia are presented in Figure 5.


Figure 5 - Grain consumption in the Russian Federation and possible reserves for its growth

Analysis of the data presented in Figure 5 shows that domestic grain consumption in Russia includes its processing (the main volume of consumption), use for seeds and for feed purposes.
The volume of grain processed and used for food production has remained virtually unchanged in recent years and amounts to 45-47 million tons.

The volumes of grain used for feed and sowing purposes also practically do not change from year to year, because The area under crops for grain and livestock increases slightly, and these volumes amount to 10-11 million tons for sowing purposes, and 10-11 million tons for use for fodder.

The entire surplus of grain is used to create a carryover stock, which should not be too large, and mainly for grain exports, which has been constantly increasing in recent years, as can be seen from the data presented in Figure 4.
World grain exports, according to USDA forecasts, amount to 325-335 million tons. The first place in terms of grain export volumes is occupied by the USA 69-70 million tons, Russia, depending on the year, ranks 3-4.

Taking into account the constant competition in the grain market, the growing volumes of grain production and carry-over stocks, the low quality of Russian wheat, the sanctions of the European Union, the United States and other countries imposed on Russia and the geopolitical situation in the world, the export of Russian grain will be gradually limited and, presumably, will not exceed 40 -45 million tons


Figure 6 - Business case: US experience in expanding domestic demand for grain

For comparison, Figure 6 shows the volumes of domestic grain consumption in the United States. From the presented data it is clear that over three years the volume of domestic grain consumption in the United States increased by 11 million tons, mainly due to the processing of corn into bioethanol and the production of other food products from wheat, i.e. due to deep processing of grain.

Thus, the time has come when, taking into account the above factors, it is necessary to change approaches to the grain market and not limit it only to exports and domestic consumption.

It is necessary to develop in Russia deep processing of grain in order to obtain new products from it and replace them with products imported to Russia and export not grain (raw materials for obtaining new products), but products of its processing with added value - flour, cereals, bioethanol, dry gluten, high-calorie feed for birds and animals and other types of goods.

Literature
1. Vetelkin G.V. Grain market: The global export market has fallen. J. "Agribusiness", Krasnodar, 2009, No. 1, pp. 24-29.
2. Vetelkin G.V. Grain balance of Russia. J. "Agobusiness", Krasnodar, 2011 No. 3, pp. 12-19.
3. http://agrovesti.net/zenovie/mirovoy_rinok. Agrovestnik. The world wheat market, the role and place of Russia in this market. International independent Institute of Agricultural Policy. Cereals. 06.28.16.
4. State program for the development of agriculture and the relationship of markets for agricultural products, raw materials and food for 2013-2020, approved by Decree of the Government of the Russian Federation of July 14, 2012 No. 717.
5 S. Phillips, R. Norton. Wheat grain production and use of mineral fertilizers in the world. http://eeca.ru.ipini.net/EECARU-2163/ 02/08/2013/

Vetelkin G.V., Candidate of Technical Sciences
KB FGBNU "All-Russian Research Institute of Grain", Krasnodar
e- mail: gvetelkin@ mail. ru

The article was published in the collection:
Modern methods, means and standards in the field of assessing the quality of grain and grain products: Collection of materials of the 14th All-Russian Scientific and Practical Conference (June 5-9, 2017, Anapa) / KF FGBNU “VNIIZ”. - Anapa, 2017. - pp. 16-21 (Electronic resource)

Demand for Russian grains abroad is reaching its limit. Further growth in exports is possible due to the opening of new markets and the promotion of new crops, reports RBC.

At the end of 2019, the growth in agricultural production in Russia will be higher than initial forecasts. In April, the Ministry of Economic Development predicted an increase of 1.3%, but in August they adjusted it to 1.6%.

The officials' optimism is justified. If in the first half of the year the industry grew by 1.2% compared to the same period in 2018, then in the third quarter, according to preliminary data from Rosstat, by more than 5%.

A significant share in the growth of the agro-industrial complex belongs to crop production, the share of which traditionally accounts for more than 50% of total production in the industry. “By the end of this year, we expect the second best grain harvest in the history of not only Russia, but also the RSFSR. It will be second only to the indicators of 2017. At the beginning, the harvest was expected to be even higher, but the climatic factor took its toll: dry weather in May-June caused significant damage,” confirms Andrey Sizov, director of the Sovekon analytical center (profile agricultural markets).

According to estimates by the Center for Economic Forecasting of Gazprombank, the main growth in crop production has been achieved through exports, since the domestic market is saturated with domestic agricultural products.

“The potential for import substitution is almost exhausted. The exception is greenhouse tomatoes, where the share of imports in 2018 was 58%. There is also seasonal import of cheap potatoes in March-May, when the new harvest has not yet been received and the old one has become substandard. It is possible, however, that imports of capsicums will be displaced, but such projects are not yet of interest to investors,” sums up Maxim Nikitochkin, senior manager of Ernst & Young’s group of services for agro-industrial complex enterprises.

Officials made a bet on exports several years ago. The low exchange rate of the ruble gave agricultural products additional competitive advantages, which would have been irrational not to take advantage of. The agricultural export program was approved, according to which by 2024 the volume of external supplies of grain crops alone should reach $11.4 billion.

Growth reserves

In 2017, the Russian Ministry of Agriculture proposed to subsidize the export of grain from regions remote from export sites, primarily from Siberia and the Urals, towards ports. A zero rate of export customs duty on wheat was also introduced, and investments in the development of logistics infrastructure, including capacities for transshipment of grains and oilseeds, increased.

Subsidizing measures have proven to be effective. In 2018, Russia took first place in the world in wheat exports, occupying 20% ​​of the global market with a production volume of 8.4 million tons. The share of grains in total exports is at least 40%, and it has been growing in recent years. At the same time, in foreign markets, plant growers are noticeably represented by only four grain and leguminous crops (crops whose fruits are harvested only for the use of dry grains): wheat, barley, corn and peas. Wheat still dominates among them. Thus, the Russian Grain Union predicts that in the 2019/20 season, export supplies of wheat will amount to 35 million tons. For comparison, shipments of barley and corn will reach 6 million tons and 5 million tons, respectively.

Thus, a correction in global demand for wheat or the emergence of new large exporters on the market can automatically lead to overproduction of grain in Russia. “The leading countries in the import of Russian grain, Egypt and Türkiye, are unlikely to significantly increase the volume of purchases. Most likely, growth in the next few years will not exceed 10%, which is primarily due to high competition for supplies to these countries. The political situation may play a role. No new countries will appear on the list of importers of domestic crops with large volumes of purchases,” believes Maxim Nikitochkin.

At the same time, there is reason to believe that the supply of the domestic market abroad will increase. The next harvest is also expected to be high. “This year, the area allocated for winter crops is close to a record, which can be the key to a very good harvest in 2020. The condition of the plants is generally good. There is a small problem - a lack of moisture reserves in the soil due to the dry autumn, but overall the situation is better than last year. The final harvest will depend, to a greater extent than usual, on the amount of precipitation in winter and early spring,” Andrei Sizov shares his forecast.

However, export diversification is underway. “The main trend of the past year was a high, 20% increase in volumes of oilseeds - sunflower, soybean and rapeseed and their processed products. Russia is becoming an increasingly prominent exporter of vegetable oils. These crops have the greatest potential for further growth,” says Andrey Nagurny, head of the restructuring and financial recovery group at Deloitte, CIS.

Grains and oilseeds will remain the basis of crop exports next year. Still, manufacturers will have to actively look for new markets. There is a chance for this. “It is possible to significantly increase the volume of grain exports to Asia: Indonesia, Vietnam, the Philippines, as well as to Libya. Here the growth can be 75–95%. African countries are a promising but still developing region for export,” confirms Maxim Nikitochkin.

There is room for more soybean supplies to China due to the country's trade war with the US, even as the Chinese have sharply increased their purchases of soybeans from South America. To implement this plan, officials are going to compensate soybean producers from the Far East for part of the costs of transporting agricultural machinery and fertilizers.

“Domestic oilseeds have good sales potential in some markets in China and Southeast Asia, and lentils in Iran and India,” adds Andrey Nagurny.

The task of expanding the geography of supplies is not easy, but it can be solved, as practice shows. For example, in 2017, many Siberian regions were able to increase the supply of rapeseed to China and Mongolia several times. Last year, largely due to supplies to the countries of the Middle East, barley exports were almost tripled in almost a year.