Russia's increasing grains output and exports could depress world wheat prices within five years, displacing some Australian export markets, the government's commodities forecaster said on Friday.
Additional Russian production could depress world wheat prices by 2.8 percent and coarse grain prices by 2.6 percent by the year ending June 2009, the Australian Bureau of Agricultural and Resource Economics (ABARE) said.
"The Russian Federation (is) becoming a much more important participant in world grain markets," ABARE said in a report on the country.
"Even with assumed moderate yield growth of 2.5 percent a year, Russian wheat available for export could increase to around 7 million tonnes by 2008/09." That would represent about 6 percent of world trade.
For coarse grains, mainly barley, Russian production available for export is estimated to increase to around 3.8 million tonnes and could represent around four percent of world trade in 2008/09, the report said.
"For Australian grain exporters, increased Russian grain production may lead to increased competition for market share in that region."
Before the drought year of 2002/03, Australia exported about seven million tonnes of wheat a year to Middle East markets, including Egypt about 40 percent of its total wheat exports.
It also exported around two million tonnes of feed barley to the Middle East.
Because of proximity, Russia would have a freight advantage over Australia, the report said.
Season forecasts put Russian grain production up by at least 11 million tonnes in 2004/05 and the country was expected to be active on world grain markets, ABARE said.
Australia, as the world's second-largest wheat exporter after the United States, is forecast by ABARE to export 18.2 million tonnes of wheat in 2004/05 for a world trade share of 16 percent from a forecast crop of 23.3 million tonnes.
Comments
Comments are closed.