Volga Baikal AGRO NEWS Update on the RUSSIAN GRAIN TRADING !!!


Volga Baikal AGRO NEWS Update on the RUSSIAN GRAIN TRADING !!!


The Union of Grain Exporters called on the Central Bank to consider the possibility of selling grain under export contracts for rubles against the background of sanctions imposed against Russia. The department was asked to provide ruble liquidity for foreign banks that serve grain buyers, the largest of which are Turkey, Egypt, Iran, Saudi Arabia.

It is noted that at the moment most contracts are concluded in foreign currency, however, with the beginning of Russia’s military operation in Ukraine and the wave of sanctions that followed, Russian exporters began to have difficulties with obtaining funds, since banks did not always agree to transfer money.

In addition, the Union of Grain Exporters proposed a number of measures to optimize current operations, including fixing the US dollar exchange rate to pay export duties on grain on the day funds are written off from the exporter’s account. It is noted that the sending and crediting of the amount of duty to the customs account is delayed, as a result, the funds already transferred are not enough.
The Union also asks the Central Bank to consider the issue of resuming revolving lending in rubles within the previously established limits and to develop the possibility of insuring cargo and property carriers from military risks at the national level. It is indicated that even with the increased rates, foreign companies are not ready to insure the risks associated with the entry of ships into the ports of Russia.
Chairman of the Board of the Union of Grain Exporters Eduard Zernin noted that grain exporters provide liquidity to the Russian crop production, and consumers of Russian grain are ready to work in any currency.

Dmitry Patrushev, Head of the Ministry of Agriculture of the Russian Federation, on food supplies, March 10, Interfax:

“We are ready to continue fulfilling export obligations.”

The United Grain Company (UGC) stated that there are difficulties with freight, which generally do not affect the formation of the export flow, and the issues of paying export contracts for rubles are already being worked out. There is also a positive experience of using the mechanism of payment for grain supplies in rubles with the Turkish State Grain Council.
The choice of the Russian currency is due to economic expediency and reduces the risks from possible exchange rate fluctuations, the UGC noted. In addition, it will significantly facilitate trade with Iran.

The director of Sovecon Andrey Sizov confirmed that the risks with the delivery of grain cargoes have increased against the background of the crisis. Many buyers switch to CIF contracts (the seller delivers the goods to the port of discharge) instead of FOB (delivery to the port of shipment).

At the same time, Dmitry Rylko, Director General of the Institute of Agricultural Market Conjuncture (ICAR), believes that although such a settlement scheme can theoretically be considered for Turkey, which has large volumes of mutual trade in food with Russia, it is unlikely to be possible with other importers.

Earlier, the speaker of the State Duma Vyacheslav Volodin proposed to expand the list of goods exported for rubles, starting to sell fertilizers, grain, oil, oil, coal, metals, timber for the national currency.

Recall that Russian President Vladimir Putin announced that Russia refuses to accept payment for gas supplies in dollars and euros, until March 31, he is waiting for a report on changing the payment currency to rubles. The Kremlin also said that Russia will not supply gas for free if the European Union refuses to pay for it in rubles. Russia has also temporarily banned the export of sugar and grain. Greece and the EU were warned about a shortage of wheat and cereals, Germany has already recorded a significant increase in prices for food and wheat.

From the beginning of the season to March 10, Russia exported 28.1 million tons of grain, including 23 million tons of wheat, which is about 30% lower than in the same period last season, the Ministry of Agriculture reported. According to ICAR, average prices for Russian wheat with 12.5% protein remain at $390 per ton (FOB).

Source: Kommersant.ru

Volga Baikal AGRO News Update ......

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