Page 140 - RusRPTApr24

9.1.4 Construction & Real estate sector news 9.1.5 Retail sector news
9.1.6 Agriculture sector news
The majority of global analysts predicted that the Special Military Operation (SMO) would last no more than 2 years; however, the consensus is now shifting towards its extension at least until 2026–2027.
Prolonged military actions could significantly impact the agricultural market, especially wheat, where both Russia and Ukraine are key producers and exporters. The global grain supply could also be affected by the reduction in planting areas in the USA. This year, farms have reduced their total area by 5%, and considering that the USA is the largest exporter of grains, any production shortfall could push the cost of grain to new heights.
Corn promises to be no less problematic this year. Even though the market supply volume is steadily increasing, its price remains at an elevated level (around $4), which is still at least twice cheaper than the 2022 peak when the price rose to $8, but it is still far from the real equilibrium state of the past decade ($1-$2).
Soybeans are expected to become the new hot commodity. Like corn, its price has been steadily falling from its 2022 peak (from $17 to $11.46), but unlike corn, the demand for it is expected to only grow this year.
Most traders are now aiming to short the market while it is in a transitional state between the 2023 and 2024 harvests. Farmers typically have short positions in the futures market, as they lock in prices for future crops to hedge against price drops. Currently, they are holding onto grain and betting on price increases. Time will tell how justified this position is.
140 RUSSIA Country Report April 2024 www.intellinews.com