USDA Forecasts Drop in Russian Wheat Exports

The United States Department of Agriculture (USDA) has cut forecasts for Russia’s wheat crop and exports in the 2019-2020 season, Interfax reports

Russian experts are downgrading their forecasts for a rise in grain exports due to bad weather in some of the country’s regions, and point to low stocks. However, they don’t think that Russia’s grain exports situation is a sign of a crisis in the industry.

“A decline in exports was long expected,” Gennady Nikolayev from the Academy of Finance and Investment Management told Nezavisimaya Gazeta. The expert added that “last year’s extreme success is the main reason behind it.” 

Natalya Shagaida, director of the Center for Agri-Food Policy at RANEPA, in turn, said that Russia would hardly “lose its position as the world’s leading wheat exporter this year.” “However, grain exports are not a goal but a tool to increase agricultural producers’ revenues and encourage them to make products for the domestic market that can compete with foreign-made ones,” the expert noted.

“The cut in the USDA’s forecast is not too far off from the truth and corresponds with the forecasts made by Russian analytical outlets that expected the crop and exports to drop by 0.5-0.6 tons due to partial crop destruction and a slump in grain demand that followed last season’s export boom,” said Goldman Group Executive Director Dmitry Gelemurzin.

According to him, the grain market is slightly overheated so an export decline is to be expected. “However, a thing to remember is that in light of trade wars, China is reducing the export of agricultural products from the U.S. Russian products can well take their place,” Gelemurzin pointed out.