Russia's grain exports could amount to about 23mn tons of grain in 2011-2012 MY, deputy PM Viktor Zubkov announced. Previously the Agriculture M Ministry estimated the grain exports at about 20mn tons. Zubkov also added that a discounted tariff for grain railroad transportation could be approved by the government later this month.

As reported, grain harvest is expected to be between 90mn and 92mn metric tonnes this marketing year. This summer, head of the Russian Grain Union Aleskandr Korbut argued that upon re-entering the grain exports markets after lifting the export ban, Russian grain producers will have to sell at a discount of about USD 20-USD 30 per ton. Any "come-back" to the global market has its price, Korbut then stressed, reminding that previously the premium for entering the market was about USD 10-USD 15 per ton. Korbut also believes that overall price trend on global grain markets this year will be a downwards one. To remind, last year due to severe drought and wildfires, only 60mn of grain were harvested, while domestic demand was estimated at 77mn tons. Poor harvest of grain forced an exports ban that was lifted on July 1 2011. Fitch Ratings welcomed Russia's intention not to prolong the export ban on grains, as well as to lift the export quotas on some types of grain. At the same time, Fitch believed that limitations on grain trade in Ukraine and difficult weather conditions in key grain-harvesting regions are going to continue limiting global supply of grain on the background of global prices remaining higher than five-year average. Fitch noted that although Russia and Ukraine accounted for 22% of global grain exports in 2008-2009, this share is likely to decrease to 6% by the end of the current season, concluding that Russia lifting the exports ban not necessarily being sufficient to compensate harvest losses in Europe and USA.

World-Grain