Miller Magazine Issue: 134 February 2021

55 INTERVIEW MILLER / february 2021 particularly from wheat to oilseeds. It's still a better bet undergoing conditions. So reactions? No rally, no riots, at least at this stage no strikes because there was no lobby, no unions. There is no organization to drive that. But a decline of the area under grain and first of all under wheat as that has been happening mostly heavily regulated crop. ‘NUMBER ONE BENEFICIARY WOULD BE US’ After Russia’s announcement, some big importers postponed purchases. For example, Egypt canceled a tender. Turkey booked just only 95 thousand tons of wheat while it was seeking 400 thousand tons. Where could the biggest Russian wheat buyers get their wheat? There is a strong demand from these countries as they want to ensure food security. Which exporting countries will benefit from this decision? This is a very tough season for Russian wheat buyers and large wheat importers, like Turkey and Egypt, MENA coun- tries. As I mentioned, Russia still will export wheat despite all the restrictions. So markets will have to absorb that. It has absorbed the 25 Euros tax. It's already here. I think it will be absorbed and exports will continue. So it's not like zero from March. There will be exports from March. How- ever, because of that time, which is needed to the market to absorb those taxes, volumes through the season will be lower. As I said, we were estimating wheat exports at 40.8 MMT before all taxes news. Now we are 37.8 MMT. Ukraine is running out of wheat, their export program is almost done. The EU also has very tight wheat S&D. So it means that those wheat importing countries will have to start to buy more from more distant re- gions. Potentially the US is the big- gest beneficiary. I think the US has good stocks, and they can sell part of them this season at a very good price. So, the number one beneficiary would be the US. We could see even Australian wheat come into that region as well. Obviously, Australia will be serving Southeast Asia, first of all, but take into account that demand is there and supply is not there, Australian wheat could go there. And Argen- tina… Sometimes in the past it sup- plied Egypt. But they have a very bad crop this year. And again, they will be serving more traditional buyers like Brazil this year. And also their export program is almost done already. So probably the number one bene- ficiary would be the US. But globally, all countries except Russia. So that means the Russian government did a lot to help the world prices to grow but beneficiaries from those prices would be not Russian farmers, but their direct competitors all over the world. RUSSIAN WHEAT PLANTING AREA TO DECREASE Can we say that these measures will undermine the competitiveness of the Russian wheat on the interna- tional market and also a blow to Russian credibility as a reliable supplier? Russia is very likely to produce less wheat in forthcom- ing years, if that's floating tax stays, because Russian farm- ers will be in a very challenging conditions as Argentinian farmers, because all agricultural inputs are already rising like seeds, crop protection, fertilizer, and machinery. Ev- erything's going up following higher crop prices, and it is already happening. So if you're a farmer, your input prices are going up, while your prices are being regulated. So ob- viously, your margins are just collapsing, and you're either going out of the business or you try to produce something else if you can, or you just turn part of your land for exam- ple, into fallow land. So I think we're very likely to see a decreased area in the medium term if that tax stayed there and we're very likely to see a smaller production. Smaller investments in a hect- are mean that farmers would be caring for all his costs and applying less fertilizer, cheaper crop protection. And that