Russian agricultural businesses boosted grain shipments in late August in anticipation of an increase in export taxes. Grain shipments have almost quadrupled to 1.4 million tons per week, according to Kommersant.
According to Igor Pavensky, director of the Rusagrotrans Analytical Center, exports are increasing due to rising demand for Russian wheat in Turkey, Iran, and Saudi Arabia. The cause, according to Pavensky, is the poor quality of this year’s wheat harvest in a number of European Union nations, since crops were damaged by severe rains in France, Germany, and Poland.
In response, SovEcon Director Andrei Sizov observed that strong worldwide prices and relatively low local prices had benefited grain exports. Eduard Zernin, Chairman of the Board of the Russian Union of Grain Exporters, also highlighted that the scenario in late August supported grain exports, citing a “overwhelming” report published by the United States Department of Agriculture as one of the reasons (USDA).
The USDA decreased its estimate for Russia’s wheat crop from 85 million tons to 72.5 million tons, and reduced export expectations from 40 million tons to 35 million tons owing to a fall in winter crop area.
“It created a window of opportunity for certain exporters to sell excess grain on the spot market,” Zernin said.
However, he believes that following the tariff increase in September, the window of opportunity will shut and export rates will fall at the start of next month. Meanwhile, the Russian Ministry of Agriculture maintains its grain harvest estimate of 127.4 million tons, with an export forecast of 49 million tons.
