After the one-year export ban, on July 1 Russia opened the export trading of grains, but the return on the world market is not as easy as expected until recently, experts predict.

The Government of Russia imposed the temporary export ban of the main varieties of grain, which become rather unpleasant surprise for many market participants, on August 15, 2010, in order to prevent shortages and rising prices for grains, the risk of which came against the background of the drought in 2010, and sharp reduction in grain yield indices.

The increase in grain prices, falling stocks of some the world largest food companies became the first reaction of the international community to imposition of the embargo in Russia. Traditional countries-consumers of Russian grains began looking for alternative suppliers. However, there were no shortage of grains on the world market, and trade flows were redistributed among the other countries-suppliers, and to date after almost a year "holiday" Russia will conquer back the global market.

Russian industry experts estimate the export potential in the marketing season of 2011-2012 at the level of 20-25 million tonnes, but doubt that these volumes will be able to sell.

If there were no embargo in Russia, the export prospects for the new season would be great. The export potential is good, according to Vladimir Petrichenko, General Director of ProZerno Ltd. He estimates the prospects at the level of 18-20 mln tonnes, but the country probably will not be able to export such volumes. Due to the fact that the ban on exports discarded the export industry in commercial terms to eight or nine years back, he said.

Andrei Sizov, Executive Director of the analytical center SovEkon, estimates the export in the new season at the level of nearly 16 mln tonnes. Infrastructural capabilities allow exporting such volumes. But the more important issue today is the demand on the world market. And the demand is not as large as participants of the market expected for, said the expert. He recalled that the grain prices on world markets are falling during the month period.

The decrease of prices, which was recorded prior to the opening of Russian exports, is likely to cause buyers to delay purchases of grains and wait for the further price reductions.

Thus, in the new season Russia will have to again conquer the markets, and gain the trust of buyers. Elena Skrynnik, Minister Agriculture of the Russian Federation, said that Russia "can guarantee steady supplies" of Russian grains on the world market. According to the forecast of the Russian authorities, in the new season the country will be able to export 15-17 mln tonnes of grains from the general harvest of 85 mln tonnes. Meanwhile, international experts are more restrained in the projections. Thus, the International Grains Council estimates the exports of Russian grains in 2011-2012 season at the level of 11.5 mln tonnes.

Source from AgrimarketInfo