Lack of grain storage seen as record Russian crop looms

A Russian grain terminal at the Port of Novorossiysk on the Black Sea. (

Moscow | Reuters — Russia is facing a lack of grain storage as it remains on track to produce the largest cereals crop in post-Soviet history, the head of Russia’s Grain Union, a non-government farmers’ lobby group, said Tuesday.

Arkady Zlochevsky, the head of the union, told a briefing in Moscow he expected a grain crop in a range of 114-118 million tonnes, including 69.5 million tonnes of wheat.

Russia has about 120 million tonnes of grain storage capacity; however, only 40 per cent of facilities are capable of securing good quality, Zlochevsky said.

As a result, he said he hoped the government would lift a wheat export tax, which, he said, had cut farmers’ revenues by about 50 billion roubles (C$1 billion). He did not elaborate.

The agriculture ministry said in a statement a local shortage of grain storage capacity was only possible in certain regions of Siberia if Russia harvested 115 million tonnes of grain, but added it maintained its forecast for a crop of up to 110 million tonnes.

About 73 million tonnes have already been threshed before drying and cleaning.

Traders have long lobbied for the cancellation of the duty. The tax is currently set at a minimum of 10 roubles (C20 cents) per tonne but could rise if the currency declines.

Zlochevsky forecast Russia’s 2016-17 grain exports at 38.5 million tonnes, including 28 million tonnes of wheat.

The U.S. Department of Agriculture expects Russia to beat the European Union to become the world’s largest wheat supplier in the 2016-17 marketing season, which started on July 1, exporting 30 million tonnes.

Reporting for Reuters by Olga Popova; writing by Polina Devitt.


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