Source: Oleoscope (Russia)
The maize harvest in Russia in 2024 will amount to 11.9 million tons. Due to the drought in southern Russia, the harvest could be almost 30% lower than in the previous year, reports Kommersant. This will be the worst harvest in the last six years. The economy fears that this will lead to an increase in grain prices in the country. This could affect starch producers in particular, who could demand a reduction in export deliveries.
According to analysts’ forecasts, the grain harvest in 2024 will fall by 12.8% year-on-year to 124.4 million roubles. The wheat harvest will also fall, but not as sharply – by 10.7%.
According to experts, the main reason for this decline is the dry weather in the southern and central regions of the country. The agrocomplex named after N. Tkachev. N.Tkachev Agrocomplex confirmed that corn yields have indeed decreased due to the dry spring and summer. An interlocutor at another large farm noted that yields are more than twice as high as planned: 24 quintals per hectare instead of 52, adding that despite the fact that only half of the harvest has been brought in, the situation is unlikely to change significantly.
The Ministry of Agriculture explained that the first results of the maize harvest are below the average annual values, as the difficult weather conditions during the growing season had a certain impact on the plants. The Ministry assumes that the drop in the maize harvest will not cause any major problems on the market, as the planned harvest fully covers the country’s needs, and therefore does not expect any major price fluctuations.
According to “Sovecon”, the average cost of feed corn on the domestic market is 14.1 thousand rubles per ton. The price has increased by 7.5% over the month and by 28% over the year. Mr. Sizov notes that the price dynamics for fodder corn is comparable. He assumes that the decline in the harvest may lead to further price increases on the domestic market.
Oleg Radin, President of Soyuzstarchmal, expresses his concern about the smaller harvest and the possible price increase. He also points out the problem of deteriorating quality: The share of feed corn, which is mainly used for fodder purposes, in the total amount of grain could increase. According to Mr. Radin, some market participants are already receiving offers to buy raw materials at a high price. However, the final situation will only become clear at the end of October, when most of the harvest will have been harvested.
Oleg Radin emphasizes that corn kernels account for up to 75% of the cost of starch, so a rise in corn prices could significantly increase producers’ costs. According to his estimates, processors buy about 1.5 million tons of corn, and more than 3 million tons are used as animal feed. The Ministry of Agriculture believes that corn can be replaced by other crops, including cereals, for feed purposes.
Oleg Radin, President of Soyuzstarchmal, sees a risk for the domestic market in the large deliveries of corn from abroad, especially to Iran. This could lead to a balance sheet deficit. “Soyuzstarchmal” is working on draft appeals to the government to reduce the export quota for maize. These appeals could be sent out after Rosstat has presented official data on this year’s harvest.
Andrei Sizov doubts the need for restrictions, as he believes that the market will be able to regulate the situation itself. He points out that Russia is the fifth largest corn exporter in the world after Brazil, the USA, Argentina and Ukraine. Daria Snitko, Vice President of Gazprombank, does not expect global corn prices to rise. She points out that the harvest forecasts in the USA, Brazil and Argentina are comparable to or even better than last year’s figures.