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There used to be around 200 companies involved in exporting grain from Russia in the past. Now there are only 15. This is evidence of conspiracy, said Arkady Zlochevsky, President of the Russian Grain Union, at the National News Service (NSN) press center.
Zlochevsky noted that competition is being eradicated due to duties and quotas. In recent months, the level of exports to foreign markets has significantly decreased, leading to a reduction in the number of companies engaged in this activity. Currently, only 15 companies conduct 90% of grain exports from Russia, whereas there were 200 before. Zlochevsky believes this indicates the existence of a cartel conspiracy allowing them to control the market. He cited examples of grain export monopolies in other countries and described such a situation as commonplace.
According to Zlochevsky, the grain industry is facing a crisis because farmers are refusing to grow unprofitable crops.
"We are facing a crisis in the grain industry. The number of farmers and small farms actively engaged in this activity is decreasing significantly and not growing as it did before. There are indirect signs that there is a sharp reduction in the areas under cultivation of plants. A lot of land is being sold, and the demand for grain crops is decreasing. Grain production statistics look very grim. There are no investments, investment activity in wheat has dropped to zero. It is profitable to cultivate legumes, oilseed crops, including mustard. As for grain crops, the situation looks unpromising. There is no hope for improvement because good profitability is needed for investment. And under the current rates, it must be higher than before. We thought it should be 40%," explained Zlochevsky.
Zlochevsky reported that the maximum grain harvest expected in Russia this year is 125 million tons, which is a result of the previous year.
"We are already seeing improvements in the sowing of winter crops. Analysts have even begun to raise their crop forecasts. According to the Ministry of Agriculture, 90% of winter crops are in good condition. Although this is slightly lower than usual when the lists are 6-7%, now the risk is 10%. But this is not the final stage; the harvest has not started yet. At the same time, I do not quite understand the optimism of analysts. According to some forecasts, production will exceed last year's results. Probably these forecasts are based on data about a larger sowing area, but I do not predict an increase in the sowing area for grain crops. The area under grain crops is actually less than last year. The harvest this year is estimated at 145 million tons, but we cannot speak about it. The maximum expected harvest this year is the result of last year - 125 million tons," he noted.
Zlochevsky said that wheat forecasts for this year vary.
"If there are frosts in May, as last year, the crop situation will change. Last spring, more than a million hectares were deducted. An optimistic forecast for wheat harvest is 82 million tons, but there are forecasts much lower - 79 million," he added.
The total grain exports this year are expected to be at a level of 48 million tons, but shipments have decreased.
"We are witnessing a significant decrease in shipments of all grains, including wheat. This increases internal stocks as exports decrease. Forecasts for stocks are now being raised, although there were different forecasts in the fall and winter. We estimate the total export at a maximum of 48 million tons, with a maximum of 42 million tons of wheat this season. Currently, export duties are decreasing due to the strengthening of the ruble, as they are calculated based on exchange rate dynamics. Prices are falling, and we are not ready to sell at such prices. Export is currently unprofitable. In April, we sent two to three times less than last year," Zlochevsky explained.
