Russian Exporters Set to Build Own Grain Ships


Apr 20, 2023 | Agricultural Markets News

Reading time: 2 minutes

By the end of the current agricultural year (ending June 30, 2023), Grain market experts have already more clearly defined their export estimates. According to them, this agricultural year, exports can range from 56 million to 58.5 million tons, including 46 million to 48 million tons of Wheat.

“Based on the current dynamics of shipments, we can say that the export of Grain and leguminous crops this season will amount to 58-58.5 million tons, including 47.5-48 million tons of Wheat,” said independent expert Alexander Korbut. According to him, these figures do not consider data on the export of flour and other processed products in terms of Grain. “With processed products, there may be another 1-1.2 million tons in Grain,” he noted.

Korbut did not predict Grain exports in the new season (which starts on July 1, 2023). “It will depend on what kind of crop we collect. In assessing the harvest, I still tend to the upper bar of the previously announced forecast of the Ministry of Agriculture – 127 million tons,” he added. The export potential will be pretty good, although lower than in the current season.”

According to Dmitry Rylko, Director General of the Institute for Agricultural Market Studies (IKAR), total Grain exports will amount to 57 million tons, including 46 million tons of Wheat. “This assessment has been holding for a long time. April will be a good month for shipments, but not as strong as it was thought a couple of weeks ago because the weather in the ports is failing,” he said.

At the same time, IKAR lowered its estimate of Barley exports to 5 million tons from 5.5 million tons, which was forecast earlier. Deputy General Director of the United Grain Company (OZK), Ksenia Bolomatova, predicts Grain exports of 56-57 million tons. Its assessment is given by the Agroexport Center under the Ministry of Agriculture. “As exporters, we are traditionally among the top five,” she said.

According to her, in this regard, it is critically important for the company to create its own fleet. “If we say that we are a commodity distribution logistics operator, then we must guarantee delivery to the end consumer,” Bolomatova said. “If we used to work from the field to the ship, now, given the restrictions we faced, we realized that Russia, being the largest Wheat exporter, must have its own fleet.”

Now OZK, together with the Ministry of Industry and Trade and the Ministry of Agriculture, is developing a program for the construction of bulk carriers. With the participation of the largest exporters and shipyards, the terms of reference have been prepared. Based on it, Rosagroleasing ordered the design work. “We expect that a project will be developed within eight months, following which the shipyards will have the opportunity to assess the cost of construction. The next stage is to determine the mechanisms for financing and measures of state support for the project,” she said.

The need for OZK is 19 bulk carriers. “It is not a task to switch to 100% self-sufficiency; we have many friendly shipowners who perfectly manage their fleet. Rather, it is about risk diversification,” Bolomatova explained.

Russian Exporters Set to Build Own Grain Ships

Russian Grain Exports

According to AgFlow data, Russia exported 9.2 million tons of Wheat and 0.36 million tons of Barley, respectively, in Jan-March 2023. For Barley, Turkey imported 0.24 million tons from Russia, followed by Libya (57,381 tons), Tunisia (27,000 tons), and Israel (25,000 tons). In the 2021/2022 agricultural year, the Russian Federation exported 38.1 million tons of Grain, including 30.7 million tons of Wheat.

Other sources: ZERNO

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