World Grain - August 2017 - 30

REGIONAL REVIEW: COMMONWEALTH OF INDEPENDENT STATES

Ukraine corn situation

but this year it is hovering around 55 to 60 rubles to the dollar
on the foreign exchanges. That helps the competitiveness of
35,000
any exporter."
30,000
Russia's position in the market also is helped by wheat
quality
that Still called "exceptional."
25,000
"It is, I would maintain, the best quality-to-price ratio of any
20,000
milling wheat anywhere in the world," he said. "You are getting
more bang for your buck. You have 12.5 protein on a dry basis,
15,000
generally that is the standard, and you have strong gluten - 25
10,000
gluten ISO, and you have test weight that is generally minimum
78. You have a falling number that is at least 280 if 300.
5,000
"The only Achilles heel in Russian wheat is bug damage
0
and that has been greatly improved from when I started trading Russian wheat. We were working on 2% maximum bug
damage and that was a huge hurdle to climb over to get down
to guaranteeing 1%. Now we are often getting, in the milling
Exports
*Projected **Forecast
Production
wheat that we are shipping, less than half a percent.
"We're not getting down to the 0.1% that French wheat
Russia wheat situation
gets or effectively zero damage, so that will preclude Russian
(in 1,000 tonnes)
wheat from getting into the Algerian market. The OAIC has
80,000
DPD[LPXPEXJGDPDJHVSHFL¿FDWLRQWKDQNVWRVRPH
70,000
very good lobbying by France Export Céréales, but we have
60,000
broken into markets worldwide. We have eaten into the market share of hard red winter into Nigeria, even into Mexico,
50,000
to Venezuela, partly on a government-to-government basis.
40,000
Russian wheat has gone to Peru."
30,000
Millers have been impressed with Russian wheat when
compared to what they'd been buying before.
20,000
"For example, Indonesian millers have almost exclusively
10,000
been taking Canadian or Australian wheat, which is relatively
0
strong, hard wheat," he said. "They have generally no wheat
themselves for six months of the year, so they take Black Sea
wheat in the July to December period."
The same thing happened in Jordan.
Exports
*Projected **Forecast
Production
³:HZHUHWKH¿UVWFRPSDQ\WREUHDNLQWRWKH-RUGDQLDQPDUSource: U.S Department of Agriculture
ket, which had tenders that were ostensibly for hard red winter
wheat, U.S. wheat, but in the small print of the tender it does
ORZ DQG WKHUHIRUH WKH SUR¿WDELOLW\ RI WKH IDUPLQJ LV KLJKHU actually say 'or equivalent from other origins' and people used
You are getting a good rate of return for investments in ag- to tender hard red winter wheat or German wheat or Australian
riculture. Therefore, a lot of people in the last 10 years have wheat," he explained. "We tried to ship them Russian wheat
gone into the agricultural sector in Russia in big style. They and the rest is history. Now you don't really see other origins
have bought up or leased land and made relatively large land- getting a look in. It is Russian or Romanian; that is it."
holdings. I think there are about a hundred agri holdings now
Russia also has the advantage of having two of the largest
consisting of more than 100,000 hectares in Russia."
markets for wheat right on its doorstep.
7KDWFUHDWHVIXUWKHUFRVWHI¿FLHQFLHVKHVDLG
"You have a great advantage into Turkey and Egypt," he said.
"If you have a big farm, several big farms, then you are buy- "Those two markets combined account for a large proportion of
ing the inputs cheaper, often from suppliers, whether it is seed or the Russian milling wheat exports, because they are so close,
agricultural equipment, because you are bulk buying," he said.
because they have constant demand and they have geared up
It also has helped that the world market has been through a their milling industries to use Russian wheat in their mills."
period of being relatively well supported.
³7KH UXEOH KDV EHHQ D KXJH IDFWRU LQ WKH SUR¿WDELOLW\ RI UKRAINE DEALING WITH POLITICAL UPHEAVAL
Russian agriculture," he said. "It has been relatively weak. It
Ukraine's position as an exporter has been against a backis stronger than it was last year. Last year we got down to 80 ground of political upheaval.
(in 1,000 tonnes)

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17*

2017-18**

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17*

2017-18**

August 2017 / World Grain / www.World-Grain.com

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World Grain - August 2017

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