World Grain - December 2020 - 26

We have immense opportunities
in the Black Earth region. With
the rising average temperatures,
this area could become the
world's new breadbasket.
impact on the grain industry. Some transport restrictions were put in place, and access to some markets
was temporary limited, but unlike fruit or vegetable
production, we have no need in the additional workforce, so we managed to handle this situation smoothly.
WG: How's the Russian grain export picture looking?
Korbut: If we talk about this season, export supplies are robust. We have already exported 18.3 million
tonnes of new-season grain, and I'm pretty sure we
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and possibly even beyond. Our export machine works
properly, despite the drought and some production decline in the Russian south.
WG: How did the Russian government's grain exSRUWTXRWDWLRQD൵HFWVXSSOLHV "
Korbut: Just like the pandemic, the export quota inWURGXFWLRQKDVD൵HFWHGWKH5XVVLDQJUDLQLQGXVWU\SRVLtively. The unfavorable weather conditions in France,
as well as in several other countries, have undermined
the European ability to export wheat. All in all, in
WKH ¿UVW KDOI RI WKH VHDVRQ 5XVVLD KDV UHPDLQHG WKH
only one big grain supplier on the global market.
Quite a few countries are concerned over new
coronavirus-related restrictions and target
to establish certain grain reserves. This
factor drove the export prices up. We
are delighted with the export prices
because, on 80%, they are transferred to the domestic purchasing
prices. The quotas played primarily
a psychological role. Among other
things, the authorities targeted to constrain the domestic prices with these
quotas, but quite the opposite happened
- there was a price hike.
WG: What do you think about the governKorbut ment's plans to introduce new quotas in 2021?

Korbut: The new quotas we promised are acting in
the same way - they stimulate customers to place orders for as long as there are no guarantees that the grain
would be available in the future. The plans currently
under discussion envisage the quota introduction already from Jan. 1, 2020. It is set at 20 million tonnes,
which is basically a relatively comfortable level. If the
26

overall export is limited to 50 million tonnes (in the
entire 2020-21 season), this is not a problem for us. The
government has promised to improve the quotas distriEXWLRQVFKHPHVRLWZRXOGQRWEHÀDZHGLQWKHIXWXUH
Nevertheless, our stance is that the quotas bring little
WRQREHQH¿W²LWLVQRWDWRROWRUHJXODWHWKHGRPHVWLF
market, especially when we have such a good harvest.
WG::K\ZDVWKHTXRWDVGLVWULEXWLRQVFKHPHÀDZHG "
Korbut: First, everything was going well. Exporters
were applying for quotas and getting them in a norPDO ZD\ 7KH QXPEHU RI H[SRUWHUV KDV VLJQL¿FDQWO\
dropped, compared to the previous season, but export
continued as usual. Then, the mayhem began - some
companies refused from quotas, so they were picked
XSE\RWKHUV7KHVHFRPSDQLHVR൵HUHGDKHOSLQJKDQG
to their partners who needed to execute their contracts.
However, this involved supplies for hundreds of thousands of tonnes, which shows that the scheme was not
working adequately. We raised concerns that some
FRPSDQLHV ZLOO JHW TXRWDV WR UHVHOO WKHP ,¶P FRQ¿dent this also took place. The problem was that the quotas distribution scheme was not entirely transparent. In
the end, one could get the impression that only chosen
companies got the quotas.
WG: Some Russian poultry and pork producers have
complained about high grain prices on the domestic
market. What are your thoughts on the matter?
Korbut: Now, we also have bakers (complaining
over high grain prices). I'm not aware of any claims
from pig farmers - they have a good margin. The
prices indeed are on the rise, reaching $252 per tonne.
Some market players even sell for $257. However,
this is a temporary phenomenon. As I said, Russia is
the only big grain exporter on the global market, from
which you could purchase grain. Once Australia and
Argentina bring their grain on the market, rest assured
this would bring a price relief. It is yet to be seen what
will happen with the global prices after the US presidential elections. Every scenario seems possible. They
could skyrocket or slump to the lowest levels. The
Russian ruble's exchange rate dropped by nearly 20%
(since the beginning of the pandemic). In Russia, grain
is an export commodity, and 35% of all grain production is exported, which means the domestic prices are
following export prices. The news about the new export quotas spills additional fuel to this situation.
WG: This season Russia collected its second largest
grain harvest. Is there room for further growth in grain
production in the country?
Korbut: The production would follow the demand.
There are no other factors. The internal demand is
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