World Grain - January 2005 - 20

countryfocus
price intervention program, which was
introduced three years ago to protect
producers from price volatility. It has set
a minimum price for Class 3 wheat of
4,000 rubles (U.S.$144) a tonne.
However, a problem with the program
is the government does not have sufﬁcient funds to buy wheat, undermining
its effect on the market.
Mill privatization and consolidation
have been ongoing during the past decade. Small mills still predominate and
capacity utilization varies widely.
Flour production has been steady during the past few years. In 2004, it was
on track to reach and maybe surpass
last year's production. According to the
latest ﬁgures available, millers produced
5.2 million tonnes of ﬂour by June 30.
The full 2003 ﬁgure was 10.8 million
tonnes, which was 2.5% up on 2002.

of the immediate post-Soviet era.
While the cattle herds are still declining, pig and poultry numbers are rising.
Part of the incentive for higher pig and
poultry production is high prices. One of
the reasons given for the price rise is the
impending introduction during the next
three years of tariff rate quotas (TRQs)
for beef and pork imports of 420,000
tonnes and 450,000 tonnes respectively
and a pure quota of 1.05 million tonnes
for poultry.
The 2004 above average grain crop is
expected to provide enough feed grain
for the meat industry to continue to
pursue growth. However, factors that
could upset this situation are export
feed grain demand, domestic retail
prices and input costs.
The USDA has forecast stable Russian meat production in 2005 as a 3%
growth in pork production compensates
for a 4% drop in beef production. Poultry production was forecast to grow for
an eighth straight year, with broiler production set to reach 705,000 tonnes.

LIVESTOCK AND FEED
The livestock industry was the hardest
hit agriculture sector when reforms began to kick in early in Russia's post-Soviet period. Meat production, particularly
beef, slumped, and Russia became a net
importer of beef, pork and poultry.
Since then, the industry has stabilized a bit as producers seek to meet
consumption demand, which is steadily
increasing after falling amid the turmoil

TRADE
Grain production in 2004 is estimated
at nearly 76 million tonnes, of which the
two biggest are wheat at 44.5 million
tonnes and barley at 17.5 million tonnes.
The Ministry of Agriculture recently

forecast total 2004-2005 wheat and
coarse grain exports to be 6 to 10 million
tonnes. But observers think the ﬁgure
will be lower because of high domestic
prices and greater competition in foreign
markets. The USDA projects Russian
wheat exports of 6 million tonnes and
barley exports of 1.7 million tonnes.
The latest ofﬁcial export ﬁgures put
grain exports from July to September
2004 at 2.8 million tonnes, including
almost 2.6 million tonnes of wheat and
235,000 tonnes of barley.
Wheat buyers included Egypt, Azerbaijan (126,000 tonnes) and Italy (about
100,000 tonnes). Barley was shipped
mostly to the Middle East.
While grain exports are staying at
levels at or slightly above recent years,
observers believe there is potential to
increase exports if the infrastructure is
improved, notably at ports, grain terminals and the road and rail network.
This is already happening and several
projects have been announced during the
past two years involving ports and grain
terminals. New businesses are bringing
in money and expertise that could help
raise the efﬁciency, productivity and
WG
throughput at points of export.
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World Grain - January 2005

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