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Saturday, March 17, 2018

“From Russia leaked the grain”

First grain for the domestic economy was analogous to oil and gas, that is the main export product. Lean years, when the grain was bought in Canada, also behind the production volumes grow, but now the grain in the country is difficult to hold to take out more profitable. Also raised the issue of import substitution: Russian bread is still not fully Russian, and without certain measures he can rise.

From July 1, will begin a new export rate for grain: 50% percent minus 5.5 thousand rubles per ton, but not less than 50 rubles per ton. This is another desperate measure taken by the government to keep domestic grain in Russia (officially – “to balance the attractiveness of the wheat supply to the domestic market and for export”). By and large it’s a matter of security, but it may not be sufficient argument for farmers, especially in the situation of weakening of the Russian ruble, after all, to sell grain abroad has now become very profitable. Including so and soon Russia will have its own grain exchange to complete consolidation of the line of import substitution in the fields of the country.

To sell, to live

“Bread is the traditional basis of our diet, but many manufacturers are forced to buy imported ingredients. Domestic flour, though, and leveled off in quality from the EU still lags behind”

Serious passions raging in the grain market since the imposition of sanctions. Grain prices until the end of 2013 has been steadily declining due to the dumping producers from Belarus, Ukraine and Kazakhstan, went up. It should be noted that the grain – commodity exchange, and therefore tied to the exchange rate. And seasonal, but the timing of its storage make it possible to “hold” products to the most favorable moment. What actually happened: the farmers, despite the extremely high yields, took a wait in anticipation of rising prices. And in the end it turned out that to sell the production abroad is much more profitable than to sell it domestically.

To stabilize the situation on the domestic market (including through the establishment of inventories) government purchases of grain have been several times increased, which brought a few pictures to export. At the end of last year was increased control over rail transport of grain products and for phytosanitary certification. Frankly, the export certificates of Rosselkhoznadzor simply ceased to issue, making an exception only for Turkey, India, Armenia, and Egypt. Embargo on the export of Russian grain in its time was one of the reasons for the dramatic increase in Egypt, bread prices, which ultimately led to the revolution in Tahrir square.

Finally, rail rates from January increased by 13.4% “in connection with restriction of the capacity of infrastructure in the export sectors”. Trains stood on the border and the experts – the guardian of the interests of the industry. It was then in the course went energetic arguments that without the ability to export grain abroad from domestic producers, it turns out, there will be no stimulus this grain to grow. But since February came into force the “first” export customs duty on wheat, which amounted to 15% of the customs value plus 7.5 Euro (but not less than 35 Euro per ton). In March the Ministry of agriculture noted some stabilization of the domestic market in this segment and presence in the storage of sufficient volumes of grain.


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