Alexander Korbut (vice-president of MFF): Our wheat displaces U.S. from the Middle East

The current grain harvest in Russia reached, according to official estimates, 92 million tons. The draft state program on development of domestic agriculture provides to 2020 growth of grain production to 125 million tons.


In ten years it is planned to produce 10.3 million tons of flour and grain exports to increase by more than half, to 41.5 million tons. What are the prospects of our country in this market?

Says Alexander Korbut, vice-president of the Russian Grain Union:
— Our country — one of the few able to withstand the decline in prices. In 2000, when we went out to the overseas market of grain, no one believed that we would go to the five largest suppliers. Russia proved that it can produce high quality wheat at a low price. Now our grain comes in more than 60 countries. Among them — CIS and the Middle East, Africa and Latin America, Greece and Spain … We do not only in Australia and New Zealand.

The current capacity of Russian exports is estimated to 27-30 million tons. Has sold about 12 million tons. Our main customers — the Middle East. In 2005, the market is one of the largest importers of grain Egypt we had only 15%, but this year — 86%. We actually forced out of the country the United States and France. We will develop and expand the direction of Middle East exports.

A separate issue — the grain market in the Far East. Asia-Pacific — the fastest growing consumer segment: there is increased population, rising incomes, changing dietary patterns. To ensure the region’s grain needs established channels of supply. Interest in the construction of major transportation hubs in the Russian Far East are already showing of South Korea and Japan. Our capacity to create transshipment capacity is estimated at 2.3 million tons of high quality Siberian wheat. While Russia is represented by Asia-Pacific market with small volumes of exports. Here, there is fierce competition from Kazakhstan, Ukraine, United States and Canada, and Australia.

But everything has its time. Since the beginning of this year, Russia exported 370,000 tons of flour. This record levels in recent years. The fact that the export of flour — a thing quite complicated. Its largest exporters — Kazakhstan and Turkey. They firmly hold the first position. Flour exports is difficult to develop without government support. It is not only logistics, but also a political issue. Each country is interested in the processing of grain on their territory. And if the world wheat market is estimated at an average of 130 million tonnes, flour — a maximum of 12 million tons. With government support Russia may build up here and its export potential. Up to one-half million tons!

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