Russia could harvest a record grain crop this year, allowing it to boost exports to the all-time high and replenish state stocks including with grain from Crimea, Arkady Zlochevsky, the head of Russia's Grain Union, said on Wednesday. Russia, one of the world's largest wheat exporters, is in the process of harvesting a record crop at a time when its relations with the West have soured over the March annexation of Crimea from Ukraine and failure to de-escalate a military conflict between Kiev and pro-Moscow rebels in eastern regions.
Russia's 2014/15 grain crop may beat the 2008/09 record of 108 million tonnes if weather conditions remain favourable, Zlochevsky told a briefing in Moscow on Wednesday. The Union's current crop forecast stands at 104 million tonnes, including 60 million tonnes of wheat, he said, compared to the official government estimate of at least 100 million tonnes for all grain.
"It may be the second largest crop in Russia's contemporary history. It can be even higher - we can beat the record of the 2008/9 season when we harvested 108 million tonnes," he said. He forecast grain exports reaching a record of 30 million tonnes, including 4 million tonnes in August, up from 3 million in July. Wheat exports for the whole 2014/15 marketing year which started on July 1 are seen at 22 million tonnes at least.
The Russian government wants to use the large crop to replenish state stocks through grain market interventions, purchasing grain on the domestic market. It plans to start purchases in September and buy up to 5 million tonnes during this marketing year. According to Zlochevsky, part of government programme will be covered by purchases in the Crimea region, as Crimean farmers can not export grain to global markets because of legal issues.
"Not a single vessel is agreeing to enter the Crimean port now," he said. The volume of state purchases of Crimean grain has yet to be set. Crimea harvested 1.1 million tonnes of grain this year. With efforts to improve relations with countries which did not join Western sanctions, Russia banned most Western food imports in early August and agreed to boost imports of meat from Brazil and vegetables from Egypt. Egypt, the world's largest wheat importer, also plans to boost wheat imports from Russia, Russian President Vladimir Putin said after a recent meeting with his Egyptian colleague.
According to Zlochevsky, there are no signs that supplies to Egypt are already rising, but Russia is ready to boost wheat exports as soon as Egypt's demand rises in autumn. Russia does not export wheat to Brazil as its commodity does not meet its phytosanitary requirements, but "now chances (to begin exports to Brazil) are quite high," he added. "We are a member of the WTO and (taking into account) all latest processes it is possible that conditions for Russian wheat supplies will be eased," Zlochevsky said.