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for the Russian wheat harvest in 2023. The new harvest is estimated at 85.3mn metric tonnes vs. 104.2mn metric tonnes a year before, which is close to the five-year average," the consultancy noted in a statement. The weather is currently viewed as comfortable for the new harvest, experts noted. Despite temperature fluctuations in late winter, there is no ice crust on fields. Furthermore, the majority of Russian regions has sufficient moisture deposits for plants.
The Russian government is considering more than tripling the state fund for grain interventions to 10mn tonnes from 3mn tonnes, Deputy Prime Minister Viktoria Abramchenko told reporters on March 24. “We bought 3mn tonnes, but we see the carry-overs that our agricultural producers have, they exceed 30mn tonnes. We should look into the possibilities of our intervention fund as a pricing regulator on the grain market in the first place. We are considering expanding it by 7mn tonnes to 10mn tonnes,” she said. The government will need to provide RUB11bn of additional financing this year to do that and allocate over 20bn to ensure grain procurements in 2024–2025. The authorities are discussing this with the Finance Ministry, but the additional money has not been approved yet, she said.
The extension of the grain initiative has caused a collapse in global prices for wheat and corn as of March 20. According to Bloomberg, Russia's invasion of Ukraine led to a sharp rise in wheat futures in the first half of 2022 on fears of severe supply disruptions, reported Bloomberg. The introduction of the Black Sea grain initiative ensured export flows and reduced food inflation. As of March 20, wheat futures in Chicago fell 1.7% to $6.99 a bushel. Corn fell 1.1% to $6.28 a bushel, its first decline in five sessions. However, the disagreement between Russia and Ukraine regarding the initiative's duration will likely add to price volatility. This could result from the situation represented by a 60-day extension, as the agreement would expire immediately before the harvesting of winter crops in Ukraine. At that point, Russia would likely have a stronger position for negotiation because the world will need more Ukrainian grain. A 120-day extension would cover the initial harvest period.
Researcher Sovecon has cut the forecast for the wheat harvest by 700,000 tonnes to 85.3mn tonnes in 2023 because of little precipitation in the south of Russia and an ice crust in the central regions, the company said in a statement late on March 2. Winter wheat harvest is assessed at 60.9mn tonnes, with the forecast changed from 61.6mn tonnes, the spring wheat forecast remains at 24.4mn tonnes.
The West is creating obstacles to Russian agricultural exports, Foreign Minister Sergey Lavrov said on March 2 at the G20 Foreign Ministers Meeting. "Obstructions are being openly thrown against exports of Russian agricultural produce globally, no matter how the EU representatives are convincing everyone that it is not so," the Minister said. "It’s time to stop playing the food
173 RUSSIA Country Report Russia April 2023 www.intellinews.com