Until the end of 2016/17 MY, grain prices on both the world and Russian markets will not increase, and in the current realities it is necessary to talk more about the need to prevent their collapse. This opinion was expressed by the President of the Russian Grain Union, Mr. Arkady Zlochevsky, the Interfax News Agency reported.
“There are no chances to grow in the world market until the end of the season. Against this background, and also taking into account growing own stocks in the domestic market, there are also no prospects for growth. On the contrary, I’m afraid that a massive supply of grain on before spring sowing could seriously bring down prices,” the expert said.
According to him, Russian farmers, who currently hold grain, will be forced to "dump" stocks in the spring in order to raise funds for sowing.
“And such a massive supply against the background of very weak demand with a weak “export vacuum cleaner ”can lead to a collapse in prices. Prices will definitely not rise, at least it is necessary to keep the market from a landslide fall. If we talk about moderate retention, then there may be a decrease of 3-5%. A fall of 10-15% will become painful,” said the head of the Russian Grain Union.
According to the results of 2016/17 MY, the export of Russian grain is estimated by Mr. Zlochevsky in the range of 35–36 million tons.
“Although we have a resource of more than 40 million tons, and, in theory, 42 million tons should be exported this season in order to have a balanced market. To do this, in the fall it was necessary to ship at a faster pace, but the duty or the weather interfered. In addition, farmers keep grain in the hope of rising prices in the spring,” he said.
Source: APK-Inform
