Oman Buys a Stake in Russian Grain Trader
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According to the Center for Grain Quality Assessment of Russia, as of June 30, more than 1.5 million tons of Grain were harvested, including 306 thousand tons of Wheat; the rest fell on barley. At that time, institutions subordinate to Rosselkhoznadzor examined 103,000 tons of Grain, said Anita Milekhina, Director of the St. Petersburg branch of the Grain Quality Assessment Center. The share of Wheat of the 3rd class in the surveyed batches was 49%, the 4th class – 14.3%, and the 5th – 37%. Last year, according to the Center, these classes accounted for 27%, 47%, and 26% of Grain, respectively.
In addition, surveyor companies also monitor the quality of Grain. It is vital to have a clear idea of the quality of the sold Grain both for trading it on the domestic market and for international deliveries, and, as Sabina Sodikova, General Director of the Russian division of Agrozan Commodities DMCC, stressed in her report, traders do not need high-quality Wheat. “We need a medium Grain with a protein content of 11.5-12.5%,” she explained, adding that the Grain does not have to be from the current year’s harvest.
Grain shipments for export last season, according to ProZerno, amounted to 58.2 million tons, and together with processed products, according to the Center for Grain Quality Assessment, the figure reached 72.3 million tons. Both of these figures are absolute records for Russia. In the new season, the export potential will be high due to a good harvest forecast and unprecedentedly high carry-over stocks of Grain at the end of the season, which ProZerno estimates at almost 27.5 million tons.
According to the AgFlow data, Russia exported 4.2 million tons of Wheat in June 2023. In 20-30 June, key markets were Turkey (0.4 million tons), Bangladesh (0.2 million tons), Saudi Arabia (0.18 million tons), and Egypt (0.14 million tons).
Wheat prices in the new season, according to the forecast of Vladimir Petrichenko, General director of ProZerno, will be higher than in 2022/23, but significant growth is not expected. High carry-over Grain balances have formed not only in Russia but also in Kazakhstan: according to independent expert Evgeny Gan, they amount to at least 2 million tons, and the new crop in the republic, according to various forecasts, is expected to be at the level of 14-16 million tons – more average annual. The cost of Grain is also affected by dumping by Ukrainian exporters, whose main task, according to Sodikova, is to sell their products as quickly as possible and get “real money” for it.
Oman – Russian Grain Business Deal
Oman’s Southern Sea Investment LLC will become a co-owner of a significant Russian Grain trader, Demetra-Holding. Demetra-Holding is a trading and logistics company developing export infrastructure and Grain trading, introducing innovative digital products to increase Russian Grain production further and improve its competitiveness in international markets. This information was confirmed to the newspaper by the holding company. The beneficiary of Southern Sea Investment is the state investment fund of Oman. What share the Omani company will receive is not specified. Last week, the head of VTB, Andrey Kostin, said that the state bank “with a decent margin” sold its 45% stake in Demetra Holding.
According to one of Vedomosti’s sources, the deal with the Omani company is “complex structured” and involves an additional issue. According to the newspaper’s source, Southern Sea Investment is not a direct buyer of VTB’s stake but an anchor investor who will become a buyer of the additional issue of Demetra Holding. The source of the publication also noted that the Russian owners of the holding, after the additional issue, increased their share.
Other sources: PROZERNO
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