Russia Corn Export to reach 6 million Tons !!!

https://www.agroinvestor.ru / Elena Maksimova Agroinvestor November 28, 2019

Russia may export 6 million tons of corn, Export potential in this season is a quarter higher than in the past !!!

This year, the export potential for corn is higher than last year by 25% and amounts to 6 million tons, Director of the Department of Analytics of the Russian Grain Union (RZS) Elena Tyurina told Agroinvestor. With relatively stable domestic consumption, the main intrigue is actual export demand, she says. According to the territorial administrations of the Rosselkhoznadzor, based on the issued phytosanitary certificates, from the beginning of the season to November 5, 834 thousand tons of agricultural crops were exported (taking into account supplies to the countries of the Customs Union), which is 27% more than the same period last year.

The US Department of Agriculture estimates the volume of demand in the world corn market this season at 172 million tons – in fact, as in 2018/19. However, the structure of consumption will change somewhat. In particular, the demand for corn in China will increase by 2.5 million tons, by 1.1 million tons in Mexico, by 1 million tons in Iran, and by 0.5 million tons in Vietnam. “These are the target markets with which we can potentially work to increase sales,” Tyurina said. The main market for Russian corn is Iran, which now accounts for 66% of all Russian exports compared to 50% in 2018, she compares. Also, Turkey increased its purchases 3.5 times compared to last year, now its share in Russian exports is 20%.

At the same time, the number of countries buying Russian corn fell to 13 against 30 a year ago, which indicates serious competition in the global market, Tyurin draws attention. “This season, unlike last year, we have not yet delivered corn to Finland, Estonia, Switzerland, Germany, France, the Netherlands, Norway, Serbia, Sweden, Denmark. Also, Russia has not yet shipped agricultural crops to Egypt, she lists. “I believe that the needs of European countries are mainly covered by Ukraine, and Egypt by Ukraine, and Argentina with Brazil.”

According to the forecast of the US Department of Agriculture, this season Russia will close the top five largest global suppliers of corn, although with a strong lag behind other leaders. According to analysts, the United States will supply 50 million tons of corn to foreign markets, Brazil – 38 million tons, Argentina – 33.5 million tons, Ukraine – 30 million tons. The export potential of Russian corn is projected at 5.7 million tons.

According to Tyurina, the only factor in increasing the supply of agricultural crops from Russia may be a price advantage: Russian corn is offered on the world market at $ 12-15 / t cheaper than that of competitors. The world sales price is now at around $ 180 per tonne, which is $ 15-17 lower than last year, Tyurina compares. On the domestic market, corn costs an average of about 9.2 thousand rubles per ton against 10.3 thousand rubles per ton a year ago.

The decline in prices is associated with an increase in yield. According to the Ministry of Agriculture, on November 28, the country threshed 13.8 million tons of corn for grain in bunker weight, while last year the harvest amounted to 10.9 million tons. About 11% of the crops remain to be harvested. According to the forecast of the Russian Grain Union, the gross yield of agricultural crops will be approximately 14 million tons in net weight – this is 2.6 million tons more than in 2018, but nevertheless lower than the record in 2016, when 15.3 million tons were collected.

Agricultural crops this year increased by only 100 thousand hectares compared to 2018, while they are 400 thousand hectares less than in 2017. The main factor in the growth of gross harvest is an increase in productivity by about 10 kg / ha to 59.9 kg / ha, according to the Ministry of Agriculture. “From this we can conclude that production efficiency is improved: farmers use high-quality seeds and modern technologies,” Tyurina comments. – Now the area under corn has stabilized, and I believe that next year they will remain at the level of 2019 – in the range of 2.5-2.6 million hectares. This is enough to meet both domestic needs and export opportunities. ”

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