Confusion: Read All About It

06/02/13 -- Various news reports started to emerge late yesterday afternoon that Russia had after all lifted the 5% import duty on grains, although official confirmation of this still seems to be lacking this morning.

What we do know is that the Minister of Agriculture is currently forecasting grain stocks in Russia to fall to 7.7 MMT by the end of the current season. Whether that total includes any provision for further grain imports between now and then is unclear.

This figure of 7.7 MMT does seem to stack up alongside 2012 grain production, plus carry-in, minus domestic consumption and exports. Whether that is enough of a comfort zone is another matter.

Agritel say that "the authorities estimate that 10 MMT of stocks are necessary in order to secure the end of campaign transition period." Clearly 7.7 MMT is below that threshold, causing Russia's discomfort.

The HGCA meanwhile say this morning that the import tariff HAS been lifted and that 2012/13 ending stocks of 7.7 MMT are "above the USDA’s estimate of 5.60 MMT but the lowest since 2007/8." Although they seem to be getting slightly confused between grain ending stocks and wheat ending stocks.

Elsewhere I read that "grain closing stocks could hit 7.7 million tonnes by July vs. the current USDA estimate of 10.50 million tonnes." Exactly where the figure of 10.5 MMT comes from is unclear. The USDA's own Jan WASDE report places Russian wheat ending stocks at 5.6 MMT and coarse grain stocks at 1.2 MMT.

We do know that the Russians have sold off around 1.6 MMT of intervention stocks between late October, when sales began, and now. They say that they were sitting on 3.3 MMT worth of intervention stocks in late January, and that they expect to sell around 3 MMT of these before the end of the season. They should certainly have little trouble doing that as they've just announced that as from next week they will also begin selling in other parts of European Russia (sales thus far have almost exclusively been in Siberia and the Urals).

What most people do seem to agree on is that even if they have, or do, lift the import tariff then it won't suddenly mean that Russia suddenly become a huge importer of grain. A 5% import duty surely doesn't make that much difference between minimal and large-scale imports? Watch this space.

In other news, cheap as chips India have apparently received a top bid of USD312/tonne in a tender to sell 35,000 MT of wheat by March 10 from the eastern port of Vizag, along with a best bid of USD312.20/tonne in s separate tender to sell 55,000 MT of wheat, also for shipment by March 10, from the eastern port of Karaikal.