Russia’s first deputy minister of agriculture
reports there are no plan to restrict grain trade with Turkey in light of events surrounding the shooting down of a Russian fighter jet by
Turkey.
Perhaps not, but the smart money
is on things getting worse before they get better so traders will be looking
for alternative supplies rather than risk getting caught up in an escalation of
sanctions and embargo's.
Unsurprisingly
Ukraine has stepped up to the plate and told Turkey they would be more than
happy to supply grain and other products should they so wish.
Yesterday Russia's minister of agriculture signed
an agreement along with VTB and the French company SEMMARIS to create Russia’s
largest wholesale food market "Agropark Maksimikha".
SEMMARIS manage Rungis International
Market, the world’s largest high-tech food and logistics centre, located in
Paris.
The 300 hectare distribution
centre to be constructed in the Moscow Region is estimated to cost about RUB
40 billion and is scheduled for completion in 2018.
The Russian ministry of agriculture will provide
subsidies and compensate 20% of direct construction expenses, because, they say, these
projects help achieve a number of priority goals in the agriculture industry.
Earlier this week Russia’s minister of agriculture gave a speech at the equivalent of PMQ’s but without the questions, where he outlined recent points of interest.
Points of interest include this year’s harvest at about 102mmt in net weight; export potential is 30mmt; this year Russia managed to produce more wheat, sugar beet, vegetables and buckwheat; it was a record harvest for maize, soybean and oilseed flax and meat production increased by 5%.
Bad news for the world’s dairy farmers was issued when he said it is necessary to increase the number of cows by 1 million to increase production by a further 6 million tonnes within the next five years.
That might help Russia’s food security but it’s going to do nothing for prices in an already over supplied market.
Ukraine has received an official response
from the European Union on ten dairy enterprises officially accepted as having
been audited thereby opening the door to European market.
EU policy towards Ukraine has publicly and
consistently been to open up markets as part of the wider integration and
development so it shouldn’t come as a surprise but it will undoubtedly be seen as further negative news by EU’s beleaguered dairy farmers.
It’s not likely to get any better either, Ukraine’s
minister of agriculture points out that "European certificates enable an increase
in exports of dairy products not only to Europe but also to other markets
including Asia and Africa”.
Another small story to slip out of Ukraine
this week was President Poroshenko extending the moratorium on farmland sales
until Jan 1, 2017.
The moratorium first
came into force over a decade ago and despite commentators (and speculators)
saying (and hoping) it would be lifted anytime soon, it hasn’t. And neither is it likely to be.
Ukraine land ownership is such a political
hot potato it will take a very strong government to bring in the necessary legislation
to make the sale, ownership and trade of land a possibility.
Even the most optimistic of us can’t see a sufficiently strong Ukraine government, in relation to land sales, for some considerable time to come.
Even the most optimistic of us can’t see a sufficiently strong Ukraine government, in relation to land sales, for some considerable time to come.
Weather in central Russia has been
unseasonably mild with daytime temperatures approaching double figures which is
not necessarily good for crop development.
I mentioned this in a tweet earlier in the week and turns out Canada and North America is
having similar weather; won’t be long before speculators pick up on the news and the market bounces upwards as a consequence. Possibly.
Ukraine and Netherlands have agreed to launch
five joint projects in sustainable agriculture and rural development.
Details are sketchy but along with a delegation
of USDA who were in Kyiv to assess the
need for further assistance programs, support for Ukraine agriculture and food
continues to remain buoyant.
Finally, Ukraine has
just approved the reform strategy for development of agriculture through to
2020.
The minister reported the strategy
provides a roadmap for reforming Ukraine's agricultural sector and is aimed at
strengthening competitiveness, improving the
business climate, increasing exports and to stimulate investment in the
agricultural sector.
I will report on
further details as and when it becomes available.