Fires ease but Russian prices still burning

26-08-2010 | |
Fires ease but Russian prices still burning

Elena Kosheva explains to the consequences of the drought of this summer.

Elena Kosheva is general director of Rossovit, a major Russian premix and concentrate producer belonging to the French InVivo NSA. “The emergency mode was announced in 32 Russian regions because of fires; now it is cancelled everywhere, the situation improved and the country returns to its usual life,” Kosheva says.
According to the official info issued by the Agricultural ministry, grain harvest is much lower than previous year and autumn sowing has been delayed.
Only 54% of total cereal acreage has been harvested by 18th August. The harvest amounts 40.1 mln tons. Autumn sowing is 2.6 million hectares.
Earlier forecast of the Agricultural ministry estimated 60 mln tons at the lowest and 67 mln tons in good weather conditions.
Russian Prime Minster Vladimir Putin stopped the export of cereals as of 15th August but said this break would have a temporary character and export operations will be resumed after the 31st December according to the first information.
National reserves sufficient
Russian government announced than national reserves can supply the consumers with the necessary products up to the next harvest.
No information about state grain interventions was given. Previously, these interventions were used to balance supply and demand in the market and to avoid large price fluctuations in cereal trade.
As a result of the abnormal weather from the beginning of August prices for cereals almost doubled. On average, the price for feed grade barley is 6000 Rub (€150) per ton and for feed grade wheat price reaches 6500-7000 Rub (€163-175) per ton. Milling wheat is purchased at 8000 Rub (€200) per ton. There is a deficit of every kind of cereal on the market.
Compound feed prices increase
Prices for compound feed increased more than 15%, live weight prices for pigs increased by 14% and its deficit is noticeable in free trade.
The situation with poultry meat, milk and eggs is not dangerous and there is no shortage for these products.
“The economical situation in the country of course had impact on our business,” says Kosheva. “We have about 30% of our sales in the pig sector.”
“All types of raw materials are sold at higher prices because of cereal deficit. The main one – bran – increased tripled in price. Our expenses grew and we have to reconsider our agreements with clients and pay more attention to their paying ability.
“The main task for our clients is to create stocks of cereals and maintain current prices for feed, to avoid herd reduction.”

Dick Ziggers Former editor All About Feed

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