Rus­sian govern­ment trig­gers a shakeup of global wheat mar­ket­ing

Australian Farmers & Dealers Journal - - News -

JUST as a weak­ened Aus­tralian dol­lar makes Aus­tralian agri­cul­tural com­modi­ties some of the world’s most at­trac­tive, the mar­ket­ing land­scape is be­ing rewrit­ten al­most faster than any­one can keep up. The Amer­i­cans are flex­ing their eco­nomic ‘aid’ mus­cles, re­port­edly giv­ing the fi­nan­cially-embattled Egyp­tian govern­ment a $100 mil­lion dol­lar aid do­na­tion. Pro­vided it is used to buy US wheat. Rus­sia has al­ready started throw­ing up trade bar­ri­ers against all ex­porters with a new tax al­most cer­tain to take it out of the world mar­ket­ing arena. And that, it seems, is only the start. In the past three years the Rus­sians have im­ported 2.1 mil­lion tonnes of wheat, al­though to­tal im­ports have de­clined in each one of those years. Now the Rus­sian govern­ment seems de­ter­mined to al­most force wheat self­suf­fi­ciency on the coun­try’s pro­duc­ers. One of the world’s largest wheat ex­porters, Rus­sia has de­nied it was con­sid­er­ing grain ex­port curbs as an op­tion to bal­ance do­mes­tic de­mand dur­ing the 2014-2015 mar­ket­ing sea­son. Plum Grove’s Tyson Fry is sug­gest­ing that is just the start with the Rus­sians, and in a re­cent mar­ket anal­y­sis said ru­mours of fur­ther trade re­stric­tions have emerged from Rus­sia, with an an­nounce­ment from the coun­try’s agri­cul­ture min­is­ter ex­pected soon. Fry also said Stats Canada es­ti­mates that De­cem­ber 31 all-wheat stocks to­talled 24.8 mil­lion met­ric tonnes. “This is down 13.5 per cent from the same pe­riod last year – but is still the sec­ond largest fig­ure recorded in 18 years,” Fry said. “South Korea also jumped into the mar­ket in mid Fe­bru­ary tak­ing a cargo of Aussie wheat,” he said. “It to­talled 40,000 tonnes of ASW at $US246/mt FOB, while a fur­ther 10,000 tonnes of Hard wheat was val­ued at $US262/mt FOB.” At the same time Archer Daniels Mid­land Ger­many (for­merly Toepfer In­ter­na­tional here) said the Rus­sian tax came in at a rate of 15 per cent plus 7.5 eu­ros, ad­ding about 35 eu­ros a tonne ($48/t) to the price of wheat. The ex­port tax was ex­pected to re­main in place un­til at least the end of June. ADM Ger­many said Rus­sia had ex­ported 17 mil­lion tonnes of wheat by mid-Jan­uary, but was only ex­pected to ship an­other 1.5 to 3.5 mil­lion tonnes dur­ing the rest of the ex­port sea­son. While Euro­pean wheat stocks are about 16 mil­lion tonnes, much is poor or feed qual­ity, with Europe from Eng­land to Hun­gary and the Czech Re­pub­lic, all bat­tered by wet weather last grow­ing sea­son. But a large part of the wheat was feed qual­ity, with France, Ger­many, Eng­land, Hun­gary and the Czech Re­pub­lic all hit by wet weather last har­vest.

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