Miller Magazine Issue 108 / December 2018

24 MILLER / DECEMBER 2018 NEWS GrainCorp profit withers in east Australia drought, challenges ahead Russia to establish in Syria largest hub on wheat exports in Middle East Russia will set up in Syria the largest hub on its wheat exports in the Middle East, Syrian Transport Minister Ali Hammoud told Sputnik in an interview to UkrAgroCon- sult. “We have reached an agreement with the Russi- an government on establishing in Syria a center for the exports of Russian wheat to other countries in the region. In this connection, it will be necessary to expand ports in Syria and create granaries in the port area to store large volumes of Russian wheat,” the minister said. Adequate infrastructure will be necessary to transport wheat to neighboring states, the minister added. “That is why we will need a railway and roads, which will be built as part of this large-scale project,” the minister said. The world’s top exporter of grain, Russia, has increased sales of its wheat abroad by 80.2 percent from January to July 2018 compared to the same period of 2017. Rus- sia has managed to capture more than half of the world wheat market in recent years, becoming the world’s bi- ggest exporter of grain, thanks to bumper harvests and attractive pricing. In 2016, the country became the world leader in wheat exports. Since the early 2000s, its share of the world wheat market has quadrupled. It supplies gra- in to Algeria, Jordan, Egypt, Lebanon, Turkey, and Iran. countries of the Middle East and North Africa demonstrate a steady growth of demand for the grain of Russian ori- gin. Saudi Arabia has announced plans to become a major hub for Russian agricultural products in the Middle East. Generally, countries of the Middle East and North Africa cover nearly 32% of all export shipments of Russian whe- at. Overall, Russia’s agricultural production is projected to grow three percent this year, from last year’s 120.7 million tons. That would be the best-ever harvest for Russia, even counting the Soviet era, according to Russia Today. Russia, the world’s top exporter of grain, will establish a center in Syria for the exports of its wheat to Middle East countries. Russia supplies grain to Algeria, Jordan, Egypt, Lebanon, Turkey, and Iran. A drought-ravaged Australia’s east coast cropping landscape and higher energy costs have shrivelled GrainCorp’s balance sheet, with the bulk grain shipper and handler’s full-year profit dropping 43.7 per cent to $70.5 million. Revenue was down $322 million, or 7.1 per cent, to $4.253 billion in the year to September 30, with a rise in malt and oil revenue failing to offset a $380 million drop in grain earnings, the company an- nounced. Total GrainCorp grain sales were down 1.4 million tonnes, or 16.9 per cent, to 6.9 million tonnes, with grains revenue dropping $380 million to $2.24 billion.There were 15 fewer silos operating the 2018 summer harvest, down from 160 last year. The company warned of a severe decline in eastern Australian grain production in fiscal 2019 due to dry weather conditions and said it expected production to be skewed to Victoria and southern New South Wales states. It said conditions would remain challenging. The 2019 financial year will be extremely challenging for GrainCorp with expectations of a substantially smaller (East Coast) crop due to the current drought,” chief executive Mark Palmquist said in a release. Australia’s agricultural commodities forecaster warned in late Oc- tober that the devastating drought was expected to cut the east coast’s crop production this year to less than half its average over the past 20 years. GrainCorp cut about 50 jobs in middle management last month and administration on forecasts of a severely reduced summer harvest, with further cuts expected as a bleak 2019 looms. GrainCorp, Australia’s largest listed bulk grain handler, said its annual underlying net profit fell 50 percent, hurt by the drought in the eastern states. GrainCorp’s first half profits dec- reased by 64 per cent to just $36 million.