Saturday, 16 February 2019

This week’s Black Sea agri-business news

Dmitry Rylko, Director-General of Russia's Institute for Agricultural Market Studies (IKAR), forecasts the 2018-19 Russian wheat harvest at 76.5MMT, up from 2017-18's 72.0MMT.

The Russian Ministry of Agriculture predicts an increase in the 2019 grain harvest to 118MMT, the minister said latest data gave grounds for raising the forecast to 118MMT, which is about 5% more than last year and will meet domestic needs and increase export potential.

At a meeting with representatives of the largest domestic grain exporters, the Russian Minister of Agriculture, Dmitry Patrushev announced they are setting up a new association of grain exporters to represent the interests of the main exporters. 

The minister urged participants of the meeting to join in with the work to create the association which will be created April of this year and is necessary to understand the general trends and demands of the market. 

It was noted that cereals remain the key domestic agricultural products supplied abroad, and the minister stressed that the ministry does not plan to impose any restrictions on the export of this crop.

It was reported that, in the current agricultural year (2018/2019), Russia increased its deliveries by 3%, to 32.6MMT, and wheat exports grew by 11% and amounted to 27.3MMT.

According to forecasts of the Ministry of Agriculture, the export potential of the grain remains at 42MMT, including 37MMT of wheat, which will ensure supplies to meet the demands of the domestic market.

The Russian government has published information on 12 National Projects to be implemented through to 2024, these include agricultural exports which they plan to increase twofold to $45bn by 2024.

In the immediate future, Russia plans to export agricultural products worth $24bn in 2019 and $28bn in 2021, (Russian 2018 agricultural exports provisionally total $25.9bn according to the Agriculture Minister)

For the record, those projects are; 1. Digital Economy, 2. Ecology, 3. Labour Productivity and Supporting Employment, 4. International Cooperation and Export, 5. Education, 6. Culture, 7. Small and Medium Businesses and Support for Business Initiatives, 8. Healthcare, 9. Demographics, 10. Safe and High-Quality Roads, 11. Housing and Urban Environment, 12. Science.

Russia’s Deputy Minister of Agriculture, Oksana Luth reported that Russia started exporting poultry products to China, and dairy product exports could start in the middle of the year.

Russia, Kazakhstan & Iran signed a memorandum on cooperation in wheat trading, allowing private & state companies to import wheat to Iran for processing & export to third countries, & export of processed wheat from Iran by flour producers, Iranian exporters and/or joint ventures.

Latest global data on organic farming released at BIOFACH this week by the research institute FiBL and IFOAM includes the following headlines: Global organic area reaches all-time high; Nearly 70MHA of farmland organic; Global organic market worth $97 billion; Almost three million producers worldwide.

BIOFACH is the organic trade fair which took place at Nuremberg this week; both Russia and Ukraine were represented with senior ministerial delegations attending.

Russia reports that the volume of the domestic organic market currently stands at 160 million euros, but given the potential of Russia for arable land, as well as the demand for such products, the Russian market may reach 5 billion euros by 2025.

Ukraine reports that the purpose of the official delegation at the exhibition is to present the Ukrainian organic agricultural sector internationally, build long-term partnerships with state authorities of other countries and participants of the organic market.

A new World Bank report on Ukraine argues that reforms in three areas are needed: 1) creating supportive conditions for the private sector; 2) addressing corporate debt; 3) strengthening markets by lifting the moratorium on agriculture land sales.

Ukrainian sugar beet area is forecast to drop 20% to 220,000HA in response to low sugar prices, according to a source from the National Association of Sugar Producers.

Ukraine ministry report field works have started with the first fertiliser being applied to 8% of the winter wheat crop, 11% of the winter barley and 19% of winter canola. They also report winter crops are in the best condition for the last five years.