Russia reaping rewards of massive grain harvest

Russia’s winter wheat harvest has taken total output for the year to 87.9 million mt, 12.1 million mt higher than at the same stage last year, data from the ministry of agriculture showed Tuesday.

Yields remain well up on year, at 3.22 mt per hectare compared to 2.79 mt per ha last year.  

The ministry of agriculture has previously suggested wheat exports for the 2017/18 marketing year could be as much as 30 million mt, over 2 million mt higher than last marketing year, helping to extend its lead as the world’s biggest wheat exporter.

Other crops are also in a strong - if comparatively less impressive – position, according to the ministry of agriculture update.

The barley harvest has seen 21.7 mt harvested, up from 19.1 million mt at the same stage last year, with yields up 2.81 mt per ha compared to 2.35 mt per ha.

Corn, meanwhile, continues to lag last year at 8.9 million mt, down from 10.1 million mt at the same stage last year. Yields are also notably down, at 4.89 mt per ha compared to 5.66 mt per ha.

The total grain harvest now stands at 135.8 million mt, up from 120.3 million mt at the same stage last year.

The record-breaking crop remains on course to be biggest since 1978, with Russia’s refocus on its agricultural capacity in the wake of low oil prices and financial sanctions now starting to pay dividends.

Greater state aid to farmers has helped to boost agricultural capacity in the years since sanctions started to bite, with the need for self-sufficiency becoming apparent to Moscow.

Grain merchants, meanwhile, have been the inadvertent beneficiary of a weaker rouble. Down 43% against the dollar since the February 2014 annexation of Crimea from Ukraine, the weaker currency has helped exporters to sell their produce around the world at prices which undercut almost all other competitors.