Report Highlights:

FAS/Moscow increased its forecast of Russia's total grain crop in MY 2015/16 by 1 million metric tons (MMT) to 103 MMT. The forecasted crop includes 61.0 MMT of wheat (the same as the official USDA forecast), 17.1 MMT of barley (the same as the official USDA forecast), 12.7 MMT of corn (0.3 MMT lower than the official USDA forecast), and almost 12.2 MMT of other grains and pulses. The forecast is based on the Russian State Statistical Service (Rosstat) preliminary crop production data. FAS/Moscow forecasts grain exports at 31 MMT, including 23.0 MMT of wheat, 3.7 MMT of barley, 3.8 MMT of corn and from 0.3 MMT to 0.7 MMT of other grains, pulses and grain products. FAS/Moscow forecast of exports of wheat is 0.5 MMT lower than the official USDA forecast, while barley and corn exports forecasts match the official USDA forecasts. Despite decreasing world market prices of wheat, barley and corn, Russian exports are supported by the volatility of the ruble exchange rate and a good crop.

General Information

NOTE: USDA unofficial data excludes Crimean production and exports. However, as of June 2014, Russian official statistics (ROSSTAT) began incorporating Crimean production and trade data into their official estimates. Where possible, data reported by FAS Moscow is exclusive of information attributable to Crimea.

Production 2015

Based on the data reported by the Russian State Statistical Service (Rosstat), FAS/Moscow increased its forecast of Russia's total grain crop in MY 2015/16 by 1 million metric tons (MMT) to 103 MMT. For wheat, barley, rye, oats, rice and millet FAS/Moscow forecast matches the official USDA forecast. For corn FAS/Moscow forecast is 0.3 MMT lower than the official USDA forecast, and close to the preliminary Rosstat data. The forecasted crop includes 61.0 MMT of wheat (3.3 percent more than in 2014), 17.1 MMT of barley (14.7 percent less than in 2014), 12.7 MMT of corn (11.9 percent increase from 2014), and 12.2 MMT of other grains and pulses (11.3 percent less than in 2014). Data officially reported by the Russian State Statistical Service (Rosstat) at the end of December 2015, include Crimea, and reports a total grain and pulse crop of 104.3 MMT, including 61.8 MMT of wheat, 17.5 MMT of barley, 12.7 MMT of corn and 12.3 MMT of other grains and pulses. The final official data on grain and pulse production in 2014, with separate winter and spring grain data will be available in late February 2016, at the earliest.

The bunker weight of Russia's crop at the end of harvest was 108.9 MMT, while the clean weight was 103.0 MMT. Thus, the 2015 losses while cleaning and drying of the grain were 5.8 MMT, or almost 5.4 percent. In 2014, the cleaning and drying losses were 5.2 percent. In 2015, the share of losses in the process of cleaning and drying grain varied from less than 2 percent in Krasnodar kray and Stavropol kray and in Rostov oblast, Russia's main winter wheat producing regions, to 13-15 percent in some Volga Valley provinces which produce primarily spring grains.

Grain and pulses area, production, yields 2008-2015

2008

2009

2010

2011

2012

2013

2014

2015 (prelim)

Planted Area, 1,000 Hectares

Wheat, total

26,633

28,698

26,613

25,552

24,684

25,064

25,002

26,559

Barley, total

9,621

9,035

7,214

7,881

8,820

9,019

9,192

8,687

Rye

2,162

2,142

1,762

1,551

1,558

1,832

1,874

1,290

Triticale

190

165

226

233

251

251

251

Oats (spring)

3,561

3,374

2,895

3,046

3,241

3,324

3,248

3,039

Corn for grain

1,812

1,365

1,416

1,716

2,058

2,450

2,683

2,770

Rice

164

183

203

211

201

190

197

202

Millet

572

522

521

826

474

490

502

591

Buckwheat

1,113

932

1,080

907

1,270

1,096

1,008

956

Legumes

1,006

1,080

1,305

1,553

1,844

1,979

1,580

1,566

Other

98

32

20

103

56

131

167

222

Total

46,742

47,553

43,194

43,572

44,439

45,826

45,705

46,132

Production, 1,000 Metric Tons

Wheat, total

63,765

61,740

41,508

56,240

37,720

52,091

59,081

61,048

Barley, total

23,148

17,881

8,350

16,938

13,952

15,389

20,026

17,083

Rye (winter)

4,505

4,329

1,636

2,971

2,132

3,360

3,279

2,083

Triticale

508

246

523

464

582

654

563

Oats (spring)

5,835

5,401

3,220

5,332

4,027

4,932

5,267

4,528

Corn for grain

6,682

3,963

3,084

6,962

8,213

11,635

11,332

12,685

Rice

738

913

1,061

1,056

1,052

935

1,049

1,109

Millet

711

265

134

878

334

419

489

565

Buckwheat

924

564

339

800

797

834

655

856

Legumes

1,794

1,529

1,371

2,453

2,174

2,037

2,175

2,323

Other

77

18

11

60

43

171

207

193

Total

108,179

97,111

60,960

94,213

70,908

92,385

104,212

103,036

Yields (tons per harvested hectare***

Wheat, total

2.45

2.32

1.91

2.26

1.77

2.23

2.50

2.39

Barley, total

2.46

2.31

1.68

2.20

1.82

1.92

2.27

2.13

Rye (total)

2.11

2.07

1.19

1.95

1.50

1.89

1.77

1.67

Triticale

2.72

1.76

2.35

2.08

2.41

2.64

2.31

Oats (spring)

1.71

1.79

1.44

1.82

1.41

1.64

1.71

1.60

Corn for grain

3.87

3.53

3.00

4.34

4.24

5.01

4.36

4.90

Rice

4.62

5.14

5.28

5.09

5.49

4.95

5.36

5.58

Millet

1.38

1.00

0.78

1.39

0.99

1.18

1.23

1.29

Buckwheat

0.92

0.90

0.59

0.95

0.77

0.92

0.93

0.95

Legumes

1.84

1.65

1.39

1.67

1.29

1.21

1.46

1.59

Source: Russian State Statistical Service (Rosstat). NOTE: for 2014 and 2015, FAS/Moscow does not include Crimea.

Winter grain area

According to Ministry of Agriculture reports, the area sown to winter grains for the 2015 crop was 15.94 million hectares by mid-December 2015. This was almost 5 percent less than the Ministry of Agriculture's preliminary forecast (referred to as the “plan"), and 3 percent less than what was sown for winter crops in 2014. These data does not include Crimea, where, according to the Russian Ministry of Agriculture, area sown to winter grains for 2016 crop was 0.38 million hectares compared to 0.41 million hectare sown in 2014 for 2015 crop. Ministry of Agriculture data published in December do not separate winter area by crops, but most of this area is sown to winter wheat. On average, winter wheat area comprises approximately 95 percent of the total winter grain area. Area sown to winter grains for the 2016 crop decreased by 8 percent in the Central Federal District (FD), in the Southern FD by 3 percent, and in the Volga Valley FD by 3 percent. Industry analysts attribute these decreases to different factors, including soil dryness in the fall, some shortage of financing for winter sowing, crop rotation and plans of some farmers to increase area sown to oilseeds and some other crops in spring. These decisions were made by farmers individually, and varied by provinces and even by farms in the same province. The general tendency was to sow winter grains on areas where the survival risks are lower and yield expectations are higher. In many cases the decision to sow winter grains is based on the crop rotation pattern which still plays an important role in Russian agronomic practices.

It is still too early to estimate winter grain survival or forecast the 2016 winter crop. In late fall 2015, some provinces in the Central FD and Volga Valley FD reported low rainfall and soil moisture which negatively impacted the germination of winter crops. However, the situation could improve by spring due to heavy snow and rainfall in January 2016. According to the Russian Hydrometeorology Service, as of mid-January 2016, eighty-nine percent of winter crops are estimated as “good" or “satisfactory," while the area of thinned and un-vegetated plants is 11 percent of the total area sown to winter crops. These estimates are based on the analyses of winter crops as of the end of December 2016. The status will be updated when winter is over.

Stocks

Despite the speedy grain exports in the first six months of MY 2015/2016 (July – December 2015), as of January 1, 2016, Russia's grain stocks were the second highest in the last 5 years. Stocks in southern European Russia, the major exporting region, reached the highest level in the last 5 years. Wheat stocks at assembling and processing enterprises were the second highest in the observed 5 year period.

Trade

FAS/Moscow forecasts Russia's total grain exports in MY 2015/16 at 31 MMT, including 30.7 MMT's exports of four major crops (wheat, barley, corn and rice). These exports will be the same or only 2 percent lower than the record 31.5 MMT in the marketing year 2015/16. The exports include 23.0 MMT of wheat (a 1 percent increase from MY 2014/15), 3.7 MMT of barley (31 percent decrease from last year), 3.8 MMT of corn (18 percent up from last year), and approximately 0.2 MMT of rice (12 percent increase from last year). FAS/Moscow forecasts that wheat exports at 0.5 MMT lower than the official USDA forecast. Although the wheat crop is larger than the crop last year, as of December 31, 2015, cumulative wheat exports were lower than in the same period last year. FAS/Moscow forecasts exports of barley, corn and rice at the same level as the official USDA forecasts. Forecasts of corn exports are higher than last year due to better corn crop this year. Forecasts of barley exports are down compared to last year based on a lower barley crop.

Russia's total grain imports are forecasted at 0.9 MMT, including 0.5 MMT of wheat, 0.1 MMT of barley, and 0.2 MMT of rice. FAS/Moscow increased the forecast for wheat imports because the Kazakhstani tenge/USD devaluation has been greater than the ruble/USD devaluation. Post believes this is likely to stimulate shipments of wheat from Kazakhstan to Russia, despite the good Russian crop.

According to available customs data on export volumes for the period of July through December 2015, Russia exported 20.7 MMT of grain (including wheat flour in grain equivalent) and pulses. This was 2.5 percent less than during the same period in 2014. Exports were down in November compared with September and October, but increased sharply in December 2015. Industry analysts report that Russian grain exports increased in December 2015 due to several factors: the resumed devaluation of the ruble, good corn crop prospects, favorable weather in the Russian deep water ports in the Black Sea, and uncertain future trade relations with Turkey. Turkey is Russia's second biggest market for grain, after Egypt. According to official December 2015 Russian Customs data, Russia exported almost 3.8 MMT of grain, which is an historic record for any December. Russian exports included 2.67 MMT of wheat, 0.54 MMT of barley, 0.46 MMT of corn, 18,000 MT of rice, 32,000 MT of wheat flour in grain equivalent, 3,000 MT of rye, and 72,000 MT of peas. According to industry sources, actual exports of grain in December were even higher than these official statistics. The discrepancy between the Customs data and industry data is due to the long procedures for calculation of the wheat export duty. Ships are sent with temporary customs declarations, and the official Customs registration is not finalized until later.

Egypt and Turkey remain the major markets for Russian grain, and in December 2015 their share of Russia's grain exports were 22 percent and 16 percent, respectively. Nine percent of grain went to Saudi Arabia, 5 percent to Yemen, and 4 percent each to Bangladesh and Iran. According to Russian officials, Russia will not restrict exports of grain to Turkey. However, if Turkey decreases imports of Russian grain, then traders will be forced to shift to other markets, and Russian officials are actively investigating other potential markets for Russian grain, including Iran.

According to industry analysts, Russian exports of grain are likely to decrease to 1.5 MMT in January 2016 due to the long January holidays and ice-cover in the shallow water ports in the Azov-Don basin. However, because some December 2015 wheat exports will be registered in January 2016, Customs will likely report higher exports than the actual exports. Additionally, the continuing devaluation of the Russian ruble in January 2016 may support Russian grain exports from the deep water ports of the Black Sea. Never-the-less, industry analysts forecast that exports in January 2016 will be lower than the exports in January 2015 when traders exported 2.28 MMT of grain on the eve of the introduction of the 35 Euro per 1 MT export duty which lasted through May 2015.

Despite the high volume of grain exports, the dollar-value of Russian grain exports has dropped. During the period July through October 2015, the volume of Russian exports of all cereals (HS customs code 10) decreased by 7 percent to 13.9 MMT compared with 15.0 MMT in the same period in 2014. However, in value terms, the same exports dropped by 30 percent (from $3.4 billion to $2.4 billion) although the structure of exported grain was almost the same. Moreover, while the increase in exports in December was supported by the devaluation of the Russian ruble versus the U.S. dollar, the world market price of grain was also decreasing. Therefore, the value of exported grain decreased. The soft Russian ruble supported not only the flow of exports, but also domestic prices in rubles for grain, especially wheat.

Policy

The export duty on Russian wheat is 50 percent of customs value, minus 6,500 rubles, but not less than 10 rubles per 1 MT. The current 12,600-12,900 rubles CPT price of Russian wheat (Class 4) at Black Sea port still allows for exports at the minimum export duty. In early January 2016, the Deputy Minister of Agriculture conjectured that the export duty on wheat may be changed, and the Ministry of Agriculture's offer on changes would be submitted to the Government by the end January. However, so far changes have not been made, and there is no information on the direction of possible future changes.

After the Government increased prices for purchases of grain to the State Intervention Fund, farmers increased sales of grain to the Intervention Fund. By the end of December 2015, the Fund purchased almost 1.4 MMT (1,399,456 MT) of grain for over 14.4 billion rubles. Almost 98 percent of this grain was purchased since October 27th, when the Ministry of Agriculture increased procurement prices. Since the beginning of interventions in August 2015, and through December 2015, Government purchases to the Intervention Fund have totaled 684,824 MT of milling wheat Class 3, 570,654 MT of milling wheat Class 4, 105,773 MT of milling wheat Class 5, 17,685 MT of food rye Class 3, and 20,520 MT of fodder barley.

According to preliminary estimates by the Russian Ministry of Economic Development (MED), the Russian economy declined 3.9 percent in 2015. Due to the difficult economic situation and the associated problems with forecasting because of the current volatility of the Russian markets, the Russian Government abandoned three-year budgeting and adopted a budget only for 2016. However, the sharp fall in the price of oil forced the Russian government to consider steep spending cuts. The current budget is based on projected revenues from oil exports at a price of $50 per barrel.

Benchmark Brent crude slid below $30 per barrel by mid-January 2016. So far Russian officials report that the cuts will not affect the budget for agriculture. Government support for crop production is likely to remain stable because earnings from exports support domestic grain and oilseed prices, however, it is doubtful that Government support for crop production will increase. The Ministry of Agriculture is trying to promote exports of Russian agricultural products, including grain by negotiating terms of such trade with Iran, China and some other countries. However, it is not clear to what extent these attempts expand markets for Russian grain.

Marketing

Grain prices in rubles stabilized at the end of 2015, and even began increasing in January 2016, while dollar-based prices for all grains decreased.

Wheat

2013/2014

2014/2015

2015/2016

Market Begin Year

Jul 2013

Jul 2014

May 2015

Russia

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

23399

23399

23636

23636

25600

25550

Beginning Stocks

4952

4952

5175

5175

6282

6282

Production

52091

52091

59080

59080

61000

61048

MY Imports

800

800

327

327

350

500

TY Imports

800

800

327

327

350

500

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

57843

57843

64582

64582

67632

67830

MY Exports

18568

18568

22800

22800

23500

23000

TY Exports

18568

18568

22800

22800

23500

23000

Feed and Residual

12500

12500

13000

13000

14000

14000

FSI Consumption

21600

21600

22500

22500

23000

23000

Total Consumption

34100

34100

35500

35500

37000

37000

Ending Stocks

5175

5175

6282

6282

7132

7830

Total Distribution

57843

57843

64582

64582

67632

67830

(1000 HA) ,(1000 MT)

Barley

2013/2014

2014/2015

2015/2016

Market Begin Year

Jul 2013

Jul 2014

May 2015

Russia

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

8024

8024

8803

8803

8050

8050

Beginning Stocks

726

726

932

932

1561

1561

Production

15389

15389

20026

20026

17100

17100

MY Imports

198

198

39

39

100

100

TY Imports

194

194

16

16

100

100

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

16313

16313

20997

20997

18761

18761

MY Exports

2681

2681

5336

5336

3700

3700

TY Exports

2791

2791

5803

5803

3000

3000

Feed and Residual

8300

8300

9200

9200

9100

9100

FSI Consumption

4400

4400

4900

4900

4800

4800

Total Consumption

12700

12700

14100

14100

13900

13900

Ending Stocks

932

932

1561

1561

1161

1161

Total Distribution

16313

16313

20997

20997

18761

18761

(1000 HA) ,(1000 MT)

Corn

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

May 2015

Russia

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

2322

2322

2596

2596

2650

2600

Beginning Stocks

297

297

292

292

350

350

Production

11635

11635

11325

11325

13000

12700

MY Imports

52

52

46

46

50

50

TY Imports

52

52

46

46

50

50

TY Imp. from U.S.

0

0

1

1

0

0

Total Supply

11984

11984

11663

11663

13400

13100

MY Exports

4192

4192

3213

3213

3800

3800

TY Exports

4192

4192

3213

3213

3800

3800

Feed and Residual

6600

6600

7200

7200

8200

7900

FSI Consumption

900

900

900

900

1000

1000

Total Consumption

7500

7500

8100

8100

9200

8900

Ending Stocks

292

292

350

350

400

400

Total Distribution

11984

11984

11663

11663

13400

13100

(1000 HA) ,(1000 MT)