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| 'Hot spot.' Who will take control of the Russian grain market |
| 2023-04-09 |
| Direct Translation via Google Translate. Edited. [RIA Novosti] Nadezhda Sarapina. Three large traders refused Russian grain at once. The Ministry of Agriculture assured that this would not affect sales volumes - the vacant niche would be quickly occupied by competitors. At the same time, companies do not leave the country permanently. About the situation on the market - in the material RIA Novosti. NO EXPORT Canadian Viterra, American Cargill and Swiss Louis Dreyfus Company (LDC) by the beginning of the new agricultural season on July 1 will close current obligations and stop servicing deliveries. Experts believe that it will not cause damage. In particular, Uralchem is ready to buy out the assets of Cargill and Viterra. The general director of the enterprise, Dmitry Konyaev, submitted a corresponding appeal to the president. Earlier, the governors of the Krasnodar, Stavropol and Rostov regions asked to reduce the share of participation of non-resident companies to 20%. Alexander Timofeev, assistant professor of economics at the Russian Economic University, explains that in the new season, Cargill accounted for only four percent of exports. In 2022 it was 5.6. Viterra and LDC have 4.1 and 2.2. President of the Russian Grain Union (RGU) Arkady Zlochevsky believes that foreigners were forced to "leave voluntarily." However, Cargill is not leaving entirely. “They have a feed production, they process starch into molasses. These assets still remain,” the expert specified. The companies will sell elevators and terminals for loading onto ships. At the same time, controlling stakes belong to Russian beneficiaries. Traders in the country do not have their own fleet for transporting grain. WHAT WILL CHANGE Analysts explain that grain prices depend on the market, not exporters. From the point of view of conducting operations, little will change, since qualified specialists will not leave the country, but simply go to competitors. It won't affect demand either. Zlochevsky notes that this year the geography of Russian deliveries has expanded to 80 countries (last year there were 60). Among the new trading partners is Algeria, which has traditionally cooperated with France. Shipments to Pakistan resumed. Saudi Arabia, in addition to the traditional barley, bought a record wheat, taking third place after Egypt and Turkey. "In total, Russia exported 45 million tons of grain. If we manage to keep the pace, then by the end of the season on June 30 we will reach 62 million tons. This is an absolute record,” adds the head of the RGU. According to Timofeev, the demand for grain will always be high both in the food industry and in animal husbandry. With the departure of private traders, contacts at the government level will become easier. The most promising partners are Egypt, Algeria, Morocco, South Africa, and Nigeria. Experts believe that a unified system of state control will ensure greater transparency of transactions and increase consumer confidence. “In addition, this will allow you to see the entire chain from the fields to the customer,” Timofeev clarifies. Dmitry Zhuravlev, scientific director of the Institute of Regional Problems, adds: "The return of state control over the grain market will facilitate the creation of a system of guaranteed quality. Russian products will turn into a brand." DIFFICULT CIRCUMSTANCES The sanctions have made it difficult to do business outside the country. Tariffs and discounts keep grain prices below market rates. Since Russian goods are risky, they are paid less. In the context of rising costs - the cost of rail and road transport, insurance - farmers are operating at a loss. "Russian grain is $80 cheaper than the world market. It is hard for farmers to cover their expenses. Investments also become unattractive - in such a situation they do not pay off," Zlochevsky notes. Low domestic prices are beneficial to adjacent areas - flour milling, baking and livestock, but ruin farmers. The abolition of duties could help the industry, the expert emphasizes. The Ministry of Agriculture does not yet plan to revise the calculation mechanisms, however, export fees will still be adjusted. First Deputy Minister of Agriculture Oksana Lut explained that they would take into account the cost, the forecast for the harvest, the external price and the ruble exchange rate. It will be felt next season. Since 2021, Russia has had a flexible - damper - system for calculating duties. According to the latest adjustment, from April 5 to April 11, inclusive, the export fee for wheat will decrease to 5179.4 rubles per ton, for barley - up to 799.4 rubles, for the export of corn - will increase to 2943.6 rubles per ton. The proceeds will be directed in the form of subsidies to the agricultural sector. |
| Posted by:badanov |
| #1 Still using grain 'repatriated' from Ukraine, are we? |
| Posted by: Mullah Richard 2023-04-09 17:18 |