A Couple Of Thoughts On Russia

01/02/12 -- The latest customs information coming out of Russia says that they've exported just over 19 MMT of grains in the July/Jan period. As of 29th Dec that figure was 17.9 MMT, meaning that little more than a million tonnes has been shipped out during January.

That's a far cry from the early season pace. Undoubtedly some of that is due to adverse weather conditions restricting the physical movement of grain. The reports we are hearing though of a lack of available grain in close proximity to the ports must also be a factor.

Maybe we are starting to see Russian exports doing a good job of capping themselves, without the need for government to step in? After all, they would surely want to avoid the negativity that would be generated by slapping two export bans on in the space of two years?

They are, at this stage at least, expecting another fairly bumper harvest on their hands in 2012, and they will be expecting to sell a chunk of that into North Africa again.

The flip side of this is IF they were to shortly introduce an export ban or some form of restriction on sales, and then subsequently produce a harvest in 2012 similar to last seasons then:

a) the carryover left from this season would leave them with even more grain to sell in 2012/13.

b) what marketing tactics do you think they'd employ to subsequently tempt buyers like Egypt back to the table?

c) how keen a seller do you think they would be once the ban gets lifted?

The combined answer to all three is that they'd surely urinate all over the market again just as they did in the second half of 2011.