Less corn from Russia
The Russian Ministry of Agriculture reduced the forecast quantity of corn dedicated for export in 2012/2013 from 15,5 to 14 million tonnes. In the previous period, 2011/2012, this quantity was twice as large, reaching 28 million tonnes. Low corn supply makes the situation on the Russian market complicated.
According to latest reports, the volume of corn in storage will have reached 9 million tonnes at the end of 2012/2013. A year before the stock was much more plentiful at 19 million tonnes. Low level of corn in storage drove the prices up to 369 US dollars per ton of wheat in 2012/2013, and 356 US dollars per ton of fodder wheat. The main cause of low supply was a summer drought on the Russian territory. The consequences of such poor yield last season will be felt for years to come.
Polish export companies are getting ready for targeting the Russian market. Our Eastern neighbor is expected to import 2 million tons of corn. However, it is worth mentioning that the duty on agricultural products imported to Russia is 5% and not likely to be lifted.
Russia helps out
In order to prevent difficulties with corn supply, the Russian government is implementing a program of market intervention, which means supplying corn from the central reserve on the market. In October 2012 1,45 million tonnes from federal reserve appeared on the market, with 3 million planned to become available by the end of the year. Should crops prove more plentiful in 2013, Russia is likely to refill the stock. Current situation might lead us to suppose that compensation of recent losses will be the priority for 2013.