Market Forecast Updates
Fair weather conditions in Russia and Kazakhstan promise an increased harvest this season, despite the detection of fusarium disease in some Russian regions. Ukraine is forecast to see a reduced yield this season.
Official data from the Russian authorities confirm that 14.69 million hectares of land was sown for winter crops in 2014. That is 0.69 million hectares fewer than the previous year. At the end of the winter, 96.1% of the crop was confirmed as satisfactory, 1.4% more than the previous year. In effect, we can say that following the winter period, most of the cargo was found to be in good condition and Russia will, as usual, take its crucial position in the international grain market.
Spring sown programmes reinforce this perspective. Further to official international data, as of 23 June 2014, 51.4 million hectares have been seeded with grain (96.4% of total area forecasted). This includes: 13 million hectares of wheat (99.4% of area forecasted), 8.8 million hectares of barley (101.1% of area forecasted), 2.7 million hectares of maize (103.6% area forecasted), 190,300 hectares of rice (96.1% of area forecasted), 948,400 hectares of buckwheat (86% of area forecasted), 963,400 hectares of rape (88.3% of area forecasted), 6.9 million hectares of sunflower seeds (96.9% of area forecasted) and 1.9 million hectares of soya (113.1% of area forecasted).
The forecast at the time of writing, is 94~97 million tones, an increase on last year’s result. Achievement of these figures, at the higher or lower end of the range depends on weather conditions during the rested period.
Russia’s predicted export volume for the 2014/15 season is of 25~28 million tones. Increasing the expected export volume does not depend solely on the wheat crop, but also harvests such as corn and barley.
First analytic results, even visual, confirm increased levels of bug damaged grain in some regions, in comparison with the previous seasons. Further testing refuted these early results and we are not seeing any negative influence on grains’ milling characteristics. Other analyses of quality parameters also prove this conclusion.
At the same time, a small number of grain harvests have been affected by fusarium disease. Strict controls ensure that fusarium affected grains meet the safety limits of international legislation and GLC analyses are being performed to monitor the situation. We will maintain a close focus on the issue. The level of this particular parameter will be also reflected in our Quality Map. - download our brochure here. Fusarium is not widespread, but has been detected on some fields in Stavropol and Rostov.
One more risk evident this season is an increase in the presence of smut grains and, as a result, a foreign smell which can limit a parcel’s suitability for further trade. All our customers are notified in advance and asked to apply strict controls during purchase and inland shipments.
Official statistics announce the total expected volume to be harvested in Ukraine this year as 56.9 million tonnes, a decrease of 9.7% against the previous record year’s 63.1 million tonnes. This year’s harvest includes: wheat - 19.2 million tonnes (13.7% decrease), barley – 6.9 million tonnes (9.2% decrease), corn – 28.7 million tonnes (7.2% decrease). SGS forecasts that the harvests will be slightly less, totalling 54~55 million tonnes, including 7.7 million tonnes of barley and 25 million tonnes of corn. This trend of productivity decrease for some crops is a result of insufficient financing of technological cultivation processes.
Based on official information, Ukraine has made significant achievement in the export market this season. As of 25 June, Ukraine had exported 32.06 million tonnes of grain since the beginning of the 2013/2014 marketing year. Exports included 9.26 million tonnes of wheat, 20 million tonnes of maize, 2.44 million tonnes of barley and 350,000 metric tons of other cereals.
Weather conditions, at the time of writing, are promising. For the forthcoming season, export potential is forecast as rather good - 30.24 million tonnes, which is 3.6% less than the previous year, but still a good level (SGS forecast – 28 ~ 30 million tonnes). A detailed breakdown by crop looks like: wheat – 8.5 million tonnes (7.6% decrease), barley – 2.3 million tonnes (2.1% decrease), corn – 19 million tonnes (6.4% decrease). Undoubtedly, the export of oil seeds as well as oil itself will be a standard priority for the country.
Our Quality Map project has already started in Ukraine. Based on the project’s first results it looks as though the general quality will not be quite as good the previous year on key parameters such as protein and gluten. However, we know from experience that the first quality checks always look poor and we believe improvements will be apparent as harvesting progress.
The forecast for Kazakhstan is also rather optimistic. At the time of sowing, moisture levels in the fields was more than sufficient to expect a good quantity of crops at harvest. Bearing in mind the expected scenario (rain at the beginning of July), production is expected to be increase to 15~19 million tonnes, with exports expected to total in the region of 5~7 million tonnes.
For further information, please contact:
Regional Business Development Manager