Miller Magazine Issue: 134 February 2021

56 INTERVIEW MILLER / february 2021 implies that country will depend more on the weather. So that implies that Russia will likely lose its number one spot in the world wheat export market in the medium term. De- pending on the season, it could be the EU or the US, or Canada. So yes, that's a very sad story for Russian farmers and the Russian crop growing industry. And yes, obviously Russia doesn’t look good being a supplier to many markets to which rely heavily on Russian wheat like Egypt, Turkey, Bangladesh, like many other buys. But I think a substantial possibility is that some of the Russian buyers would go to World Trade Organization (WTO) and ask Russia to explain itself because it violates Russia's WTO obligations. Could there be a WTO sanction due to these restric- tions? WTO is not a sanctioner. WTO is not deciding anything itself. WTO is not global trade poliçe. You need someone to go to WTO and tell that WTO to look into this matter… Someone who feels that he's losing money and not doing well because of those actions. For example, if a large Rus- sian wheat buyer wants to do that, he goes to the WTO, he proves that prices are going up or it can’t buy enough wheat because of Russia actions, WTO starts a case where it's listening to different sides of this story and makes the decision. But typically, it takes not months, it takes several years. For example, China and Australia trade war, which has started probably almost a year ago but Australia just ap- pealed to WTO just recently. I think at least half a year has passed. And we could see a decision probably in a few years earlier. So it takes time. But I think we could see such ap- peals from Russian wheat buyers to WTO. And that makes sense. Because in my view that measures clearly violates Russia’s obligations, Russia’s commitments. You can limit exports when there is an emergency like war, flooding, or other things that destroyed all the crops. In an emergency, the government can impose different measures, different restrictions on exports. But in this case, definitely there was no emergency. It's almost a record wheat crop. There's plen- ty of stocks inside the country and Russia started to regu- late to restrict exports very badly. And that's why it in my view, violates WTO rules. And that's why there was a good chance that someone of Russian wheat importers will go to WTO. We all know that Rus- sia has set its agricultural products export target for 2030 as 45 billion dollars. Given such kind of though export restriction decisions, do you think does Russia abandon its ambition to become a world agricultur- al export powerhouse? Probably I would agree. It has been not fully aban- doned but became less im- portant than it used to be. Russia was supposed to reach that target by 2024. And it was just postponed several months ago. That target was moved to 2030, by six years, and it hasn't been upped. But it's the same number plus six years. Obviously, it means that it's not as important as it used to be. I think the importance of that story is becoming less important for Russian author- ities than it used to be, despite President Putin personally loved the story of Russian grain exports. He likes to mention how Russia is the number one world wheat exporter. But it looks like he won't be able to say that in a few years. Russian winter crops suffered from dry weather. Can you give us the latest growing conditions in Russia? And what can you say about the next crop planting cam- paign? As I mentioned, our most recent forecast is 77.7 million tons. That's substantially below the previous year when it was 85.9 million tons. Russia planted another record winter wheat area during previous autumn. There is no data on wheat specifically but the total grain area was more than 1 million hectares, above the previous season and last sea- son was the previous record. But it was another very dry autumn, even drier than the previous one. And that dry autumn came after a very dry summer. And as a result, crop up entered that winter in the worst shape in a decade. Ac- cording to the Russian Meteorology and Hydrology Center, they assess crops condition every late autumn, the share of in poor shape was 22%, compared to around 4% in the previous year. That's why that increase in production area will likely be fully offset by the very bad shape of plants in autumn. And actually, we had an even lower estimate, it was 76.8 million tons. We upped it a little bit in January because winter so far has been relatively favorable for Rus- sian crops. December was average a bit dry, but January looks quite good. So there's a lot of snow in January, above the norm, and that was very timely because it likely helps to boost moisture reserves later. And it also insulated plants from a cold snap which arrived to rush around mid-January. So we upped a little bit of Russian wheat production.