Russia’s ag ministry to set up new grain exporters’ union

File photo of wheat being loaded onto a bulk vessel at port in Russia. (YGrek/iStock/Getty Images)

Moscow/Hamburg | Reuters — Russia’s agriculture ministry will set up a new grain exporters’ union to better understand the needs of the market, it said on Monday after its routine meeting with local grain traders.

Traders interpreted it as a result of the close attention with which Russian officials have been monitoring how big exporters are faring given a lower 2018 crop since September.

The new union will be created by around April, when the ministry plans to start discussing grain export plans with traders for the 2019-20 marketing season which starts on July 1, it said.

The ministry also said it did not plan to impose any restrictions on grain exports. It kept its forecast for Russia’s 2018-19 grain exports at 42 million tonnes, including 37 million tonnes of wheat.

Speculation that Russia, the world’s largest wheat exporter, could limit exports later in the 2018-19 season have supported global wheat prices in recent months.

“The agriculture ministry is initiating the creation of a new association, a new union of grain exporters,” the minister, Dmitry Patrushev, was quoted as saying in a statement.

“We need to understand the common trends, the common demands of the market, which is why it is necessary to form a strong association that will represent the interests of the main exporters,” he added.

The ministry called for the participants of the meeting to join the work in setting up the new union.

Major exporters of Russian grain already have a lobby group — the National Association of Exporters of Agricultural Products — which represents mainly large foreign trade houses.

Russian trade houses have become powerful players in recent years and support the creation of the new union which will represent interests of everyone, one of them told Reuters.

For traders outside the country, the ministry’s statement raised concerns about the independence of the new union from Russian officials.

“Frankly it looks rather strange and to me raises the question why do this. Does the government want a new association that agrees with the government?” a European trader said.

Another European trader said: “We need to know more about it. Is it for export promotion or slowing exports?”

Russia’s agriculture ministry did not immediately reply to a Reuters request for comment.

Russia has exported 32.6 million tonnes of grains, including 27.3 million tonnes of wheat, since the start of the current 2018-19 marketing year.

Reporting for Reuters by Polina Devitt, Michael Hogan and Maha El Dahan.



Stories from our other publications