Miller Magazine Issue:114 June 2019

18 NEWS JUNE 2019 Dmitri Rylko General Director IKAR LLC Moscow, Russia Russian wheat market situation Guest Author “Our current Russian wheat production forecast is between 81 (“base con- servative”) to 85.5 (“base optimistic”) mmt scenario. Ceteris paribus, it would allow export 38 to 42 mmt, so that Russia may keep its number one place on the world market. In the coming year we expect numerous structural changes and investments on the domestic export market. VTB Capital, the new major state-owned player, aggressively enters the grain export infrastructure. There will be important investments across several export terminals, while one big facility would emerge from nothing. We continue to observe strong invest- ments into modern grain railway hoppers, river – sea barges, and innovative developments inside grain truck transportation industry.” Over recent years Russia has become the world biggest wheat exporter. I remember some fifteen years ago we at IKAR forecasted such a development, but we thought it would happen sometime in early 2020-s. But time moved faster than expected… Moreover, being No. 1 in the world, Russian farmers, especially in export-oriented South, continue to enjoy very strong production margins. Such factors, as ruble devaluation (due to sanctions and crude oil price weakening), good weather, reasonable gov- ernment regulation, not too bad wheat and other grains international prices, and perpetual improvements across