Russia Monthly Grain Exports Seen Lower on Egypt Economy

Monthly wheat shipments from Russia, the world’s fifth-biggest wheat exporter, will be lower than in the last two years as the country can’t rely on purchases from top buyer Egypt, according to Moscow-based ZAO Rusagrotrans.

Russia’s monthly grain shipments won’t exceed 3 million metric tons during the new season that starts on July 1, said Igor Pavensky, head of the analytical department at Rusagrotrans, the nation’s biggest carrier of cereals by rail. The largest monthly shipment this season was about 3.2 million tons in September, compared with a record 3.8 million tons in September 2011, according to the company’s data.

“Egypt’s readiness to buy grain on tenders is a very significant factor for us,” Pavensky said. “How high Russia’s monthly exports may be depending on that. There is still uncertainty about Egypt’s international purchases.”

Egypt usually accounts for half of Russia’s grain exports in the September through November period, Pavensky said. The North African country, the Arab world’s most populous nation, has struggled to pay for food as foreign currency reserves dwindled and the country faced political upheaval and social unrest following the 2011 ouster of former President Hosni Mubarak. Egypt last bought wheat through an international tender on Feb. 20 and has held talks with countries from Kazakhstan to the U.S. about supplies.

Wheat for September delivery rose 0.4 percent to $6.9025 a bushel on the Chicago Board of Trade by 9:15 a.m. The grain is down 11 percent this year.

Carryover Stocks

 Russia’s carryover grain stocks, smaller than a year earlier, will also constrain exports from the start of the season on July 1, Pavensky said.

The country’s grain exports are seen at 1.8 million to 2 million tons in July, down from 2.06 million tons in the same month last year and 2.5 million tons in 2011, he said. Carryover stocks are seen at 9.4 million tons by July 1, the smallest amount since 2007-08, according to Rusagrotrans data.

 “We used to export carryover stocks in July in the past two years,” Pavensky said. “This time, we will start exporting grain of the new harvest only. This means Russia will have a weaker competitive position next month and Ukraine and France can benefit from this situation.”

Rusagrotrans estimates the national grain crop will be at least 97 million tons in 2013-14, up from 70.9 million tons in 2012-13 because of stronger winter crops and a larger planting area under spring crops, Pavensky said.

That will see exports jump to more than 23 million tons of grain and legumes from an estimated 16.2 million tons this season. Wheat exports will be 17 million tons, up from about 11 million tons in 2012-13. Barley exports may rise to 3 million tons from about 2.3 million tons this season, and corn exports may rise to at least 2.5 million tons from 1.9 million tons, he said.