Based on the officially reported data, FAS/Moscow increased its forecast of Russia's total grain crop in MY 2014/15 by 2 million metric tons (MMT) to 104 MMT. The forecasted crop includes 59 MMT of wheat, 20 MMT of barley, 11 MMT of corn, and almost 14 MMT of other grains and pulses. The volatility of the ruble exchange rate has stimulated exports of Russian grain, and during the period July through December 2014 Russia exported 21.3 MMT of grain, more than in any similar period of Russian history. However, exports in January – July 2015 will drop because of wheat export tariffs expected to come into force on February 1, 2015, and new administrative measures restricting exports. Thus, FAS/Moscow decreased its grain exports forecast from 30 MMT to 27.4 MMT, including 19.5 MMT of wheat, 4.4 MMT of barley, 2.4 MMT of corn and approximately 1.1 MMT of other grains and pulses.

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 2014

Based on officially reported data, FAS/Moscow increased its forecast of Russia's total grain crop in MY 2014/15 by 2 million metric tons (MMT) to 104 MMT. The forecasted crop includes 59 MMT of wheat, 20 MMT of barley, 11 MMT of corn, and almost 14 MMT of other grains and pulses. At the end of December 2014, the Federal State Statistics Service of the Russian Federation (Rosstat) published preliminary data on the grain and pulses crop in 2014, in clean weight. The total for all grains is 103.8 million metric tons, including almost 59 MMT of wheat (13 percent more than in 2013), almost 20 MMT of barley (30 percent more than in 2013), 11.1 MMT of corn (4.7 percent less than in 2013), almost 3.3 MMT of rye (2.6 percent less than in 2013), almost 5.3 MMT of oats (6.8 percent more than in 2013), approximately 1 MMT of rice in rough weight (12 percent more than in 2013), 0.66 MMT of buckwheat (20 percent less that the bumper crop last year), almost 0.5 MMT of millet (16.2 percent more than in 2013), and 3.0 MMT of other grains and pulses (almost 9 percent more than last year) (these Rosstat data do not include Crimea). The final official data on grain and pulses production in 2014, with separate winter and spring grain data, will be available late February 2015, at the earliest. Industry analysts anticipate that the final official data may be a bit higher than the preliminary figures. By the end of the 2014 harvest, Rosstat reported that the total grain and pulses crop, in bunker weight, was 109.5 million metric tons (MMT). Since the reported crop, in clean weight, is 103.8 MMT, the percentage of losses in cleaning and drying (the difference between bunker weight and clean weight) is 5.2 percent.

Grain and pulses area, production, yields 2008-2014

2008

2009

2010

2011

2012

2013

2014 (prelim.)*

Planted Area, 1,000 Hectares

Wheat, total

26,633

28,698

26,613

25,552

24,684

25,064

25,001

Barley, total

9,621

9,035

7,214

7,881

8,820

9,019

9,190

Rye

2,162

2,142

1,762

1,551

1,558

1,832

1,875

Triticale

190

165

226

233

251

251

Oats (spring)

3,561

3,374

2,895

3,046

3,241

3,324

3,249

Corn for grain

1,812

1,365

1,416

1,716

2,058

2,450

2,686

Rice

164

183

203

211

201

190

197

Millet

572

522

521

826

474

490

502

Buckwheat

1,113

932

1,080

907

1,270

1,096

1,008

Legumes

1,006

1,080

1,305

1,553

1,844

1,979

1,580

Other

98

32

20

103

56

131

166

Total

46,742

47,553

43,194

43,572

44,439

45,826

45,705

Production, 1,000 Metric Tons

Wheat, total

63,765

61,740

41,508

56,240

37,720

52,091

58,994

Barley, total

23,148

17,881

8,350

16,938

13,952

15,389

19,984

Rye (winter)

4,505

4,329

1,636

2,971

2,132

3,360

3,274

Triticale

508

246

523

464

582

654

Oats (spring)

5,835

5,401

3,220

5,332

4,027

4,932

5,265

Corn for grain

6,682

3,963

3,084

6,962

8,213

11,635

11,091

Rice

738

913

1,061

1,056

1,052

935

1,047

Millet

711

265

134

878

334

419

487

Sorghum

76

13

9

60

43

171

207

Buckwheat

924

564

339

800

797

834

662

Legumes

1,794

1,529

1,371

2,453

2,174

2,037

2,171

Other

1

5

2

0

0

0

0

Total

108,179

97,111

60,960

94,213

70,908

92,385

103,836

Yields (tons per harvested hectare)

Wheat, total

2.45

2.32

1.91

2.26

1.77

2.23

2.50

Barley, total

2.46

2.31

1.68

2.20

1.82

1.92

2.27

Rye (total)

2.11

2.07

1.19

1.95

1.50

1.89

1.76

Triticale

2.72

1.76

2.35

2.08

2.41

2.64

Oats (spring)

1.71

1.79

1.44

1.82

1.41

1.64

1.71

Corn for grain

3.87

3.53

3.00

4.34

4.24

5.01

4.34

Rice

4.62

5.14

5.28

5.09

5.49

4.95

5.36

Millet

1.38

1.00

0.78

1.39

0.99

1.18

1.23

Buckwheat

0.92

0.90

0.59

0.95

0.77

0.92

0.93

Legumes

1.84

1.65

1.39

1.67

1.29

1.21

1.46

*Data for Crimea are not included

*Data for Crimea are not included

Winter grain area

According to the Ministry of Agriculture by mid-December 2014, the area sown to winter grains for the 2015 crop (including the area for green chop) was 16.44 million hectares. This compares to 14.68 million at the same time in 2013. The majority of this area is planted with winter wheat. The Ministry of Agriculture data does not delineate the area by winter crop.

The data above does not include Crimea, where, according to the Russian Ministry of Agriculture, the area sown in 2014 for the 2015 winter grain crop was 0.41 million hectares compared to 0.42 million hectares in 2013.

It is still too early to estimate the condition of the winter grain crop, or to forecast the 2015 winter crop. However, industry analysts note that in November 2014, plant vegetation was delayed in the Central and Volga Valley federal district due to low soil moisture, as well as low temperatures and frost without sufficient, protective snow cover. This has resulted in weakening of the plants, and the survival of winter grain may be lower than last year. This year, more fields are likely to be re-sown with spring crops than last year.

Stocks

Despite the record-breaking grain exports in the first five months of MY 2014/2015 (July to November), as of December 1, 2014, Russia's grain stocks were the second highest in the last five years. Even stocks in the South of European Russia, the major exporting region, remained high as of December 1, 2015. However, wheat at the elevators and processing enterprises is far below the levels seen last year due to the following:

- Wheat exports are higher than last year; and

- Volatility of wheat prices still make exports attractive, and farmers decreased sales of wheat to domestic processors in MY 2014/15, vs. sales to exporters.

Trade

FAS/Moscow decreased its grain export forecast for MY 2014/15 from 30 MMT to 27.4 MMT. This includes 19.5 MMT of wheat (2.5 MMT decrease from the previous update), 4.4 MMT of barley (0.1 MMT increase due to the large barley crop), 2.4 MMT of corn (0.1 MMT decrease from previous forecast) and approximately 1.1 MMT of other grains and pulses. Post decreased estimated wheat exports because of the wheat export tariff expected to come into force on February 1, 2015, and the administrative measures restricting exports. Post decreased the corn export estimate based on the lower than expected corn crop.

In the first six months of marketing year 2014/15 (July to December 2014), Russia exported 21.3 MMT of grain. These exports are more than in any similar period in Russian history. This figure includes approximately 16.5 MMT of wheat, also a Russian historical record. Industry analysts estimate that exports in January will be 1.3 MMT. This would make Russia's total grain exports 22.6 MMT for the period July 2014 through January 2015.

Beginning September 2014, Russia's grain exports were driven almost exclusively by the depreciation of the Russian ruble. The depreciation continued, becoming even more volatile in January 2015. Thus, the stimulus for exports remains strong. However, despite the attractive price for exports, trade is expected to decrease due to the following:

- Beginning February 1, 2015, Russian Customs will charge an export tariff on wheat;

- The Russian Federal Service on Veterinary and Phytosanitary Surveillance (VPSS) strengthened phytosanitary control of export facilities and elevators, and has delayed issuing phytosanitary export certificates;

- The Russian Railway monopoly (RZhD) delayed the supply of railcars starting in December 2014 and slowed down the servicing of grain exporters.

Industry analysts report that in December 2014, Russian traders already halted domestic purchases of wheat for export in expectation of tariffs on wheat, current administrative measures and general economic uncertainty in Russia. Since there are no tariffs on exports of other grains, such as barley, corn and pulses, exporters may increase exports of these crops. However, the possible further devaluation of the ruble, or decrease of the Euro rate to the U.S. Dollar may mitigate the effect of export tariffs. In this situation the administrative measures may have a stronger impact on exports than the wheat export tariff. These uncertainties make it very difficult to accurately forecast Russian exports for the rest of the marketing year 2014/2015.

Policy

In December 2014, the Russian government increased prices for purchases of wheat to the State Intervention Fund. However, given the current situation with the ruble volatility and the uncertainty of exports, sales of wheat to the Intervention Fund are still small. For all interventions that began on September 30, 2014, the government purchased to the intervention fund only 323,032 MT of grain, including 18,909 MT of wheat Class 3 (3,510 MT were purchased to the Intervention Fund after procurement prices increased), 53,190 MT of wheat Class 4 (17,145 MT purchased at new prices), 46,572 MT of wheat Class 5 (20,517 MT purchased at new prices), 91,530 MT of food quality rye, and 113,650 MT of fodder barley.

On December 25, 2014, the Russian Government approved Resolution #1495. According to this Resolution, starting February 1, 2015, the government will implement an export tariff for wheat in the amount of 15 percent of the customs value plus 7.5 Euros, but no less than 35 Euros, for 1 MT.

In December 2014, some Russian authorities, such as VPSS, Ministry of Transportation and the Russian Railways, started using administrative measures for curbing exports. Although there are no directives by these agencies to field offices, exporters complained of the following:

- The lag-time for issuance of VPSS's export phytosanitary and quality certificates increased from the typical 1-2 days to 6 days (although this 6 day period still is not in violation of VPSS's regulations);

- VPSS strengthened phytosanitary control at all points of grain movement to ports, and more findings of violations that may lead to closure of these points;

- Transportation authorities (through port authorities that are subject to the Ministry of Transportation) imposed restrictions on departure of already loaded ships and conducted more checks of paperwork;

- Railway authorities slowed servicing of grain exporters with railway cars;

- Road transportation authorities began stopping "over-loaded" trucks that approached ports or export points.

Most of these administrative measures are not in violation of Russian legislation, but increase traders/exporters risk and logistical expenses, including penalties for demurrage.

Marketing

Ruble volatility remained the major driving force of domestic grain prices in December 2014, and in the first half of January 2015.

PSD for Wheat

2012/2013

2013/2014

2014/2015

Market Begin Year

Jul 2012

Jul 2013

May 2014

Russia

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Harvested

21,296

21,296

23,399

23,399

23,750

23,600

Beginning Stocks

10,899

10,899

4,952

4,952

5,209

5,209

Production

37,720

37,720

52,091

52,091

59,000

58,995

MY Imports

1,172

1,172

800

800

200

200

TY Imports

1,172

1,172

800

800

200

200

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

49,791

49,791

57,843

57,843

64,409

64,404

MY Exports

11,289

11,289

18,534

18,534

20,000

19,500

TY Exports

11,289

11,289

18,534

18,534

20,000

19,500

Feed and Residual

11,900

11,900

12,500

12,500

13,000

13,000

FSI Consumption

21,650

21,650

21,600

21,600

22,000

22,500

Total Consumption

33,550

33,550

34,100

34,100

35,000

35,500

Ending Stocks

4,952

4,952

5,209

5,209

9,409

9,404

Total Distribution

49,791

49,791

57,843

57,843

64,409

64,404

1000 HA, 1000 MT, MT/HA


PSD for Barley

2012/2013

2013/2014

2014/2015

Market Begin Year

Jul 2012

Jul 2013

Jul 2014

Russia

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Harvested

7,631

7,760

8,024

8,024

8,200

8,800

Beginning Stocks

848

848

726

726

973

973

Production

13,952

13,952

15,389

15,389

19,500

19,985

MY Imports

262

262

139

139

100

100

TY Imports

278

278

125

125

100

100

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

15,062

15,062

16,254

16,254

20,573

21,058

MY Exports

2,236

2,236

2,681

2,681

4,300

4,400

TY Exports

2,366

2,366

2,762

2,700

4,300

4,400

Feed and Residual

7,700

7,700

8,200

8,200

9,500

9,500

FSI Consumption

4,400

4,400

4,400

4,400

4,800

4,900

Total Consumption

12,100

12,100

12,600

12,600

14,300

14,400

Ending Stocks

726

726

973

973

1,973

2,258

Total Distribution

15,062

15,062

16,254

16,254

20,573

21,058

1000 HA, 1000 MT, MT/HA

PSD for Corn

2012/2013

2013/2014

2014/2015

Market Begin Year

Oct 2012

Oct 2013

Oct 2014

Russia

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Harvested

1,937

1,937

2,322

2,322

2,600

2,555

Beginning Stocks

350

350

297

297

290

382

Production

8,213

8,213

11,635

11,635

12,000

11,100

MY Imports

51

51

50

50

50

50

TY Imports

51

51

50

50

50

50

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

8,614

8,614

11,982

11,982

12,340

11,532

MY Exports

1,917

1,917

4,192

4,100

3,000

2,400

TY Exports

1,917

1,917

4,192

4,100

3,000

2,400

Feed and Residual

5,600

5,600

6,600

6,600

8,000

7,800

FSI Consumption

800

800

900

900

1,000

1,000

Total Consumption

6,400

6,400

7,500

7,500

9,000

8,800

Ending Stocks

297

297

290

382

340

332

Total Distribution

8,614

8,614

11,982

11,982

12,340

11,532

1000 HA, 1000 MT, MT/HA