Miller Magazine Issue: 143 November 2021

72 INTERVIEW MILLER / november 2021 Adverse weather and drought hit wheat production in North America and Russia. With the concern about shrinking production prospects and tight supplies in the major exporters, wheat prices increased further in Sep- tember. Importing countries such as Algeria, Turkey and Pakistan have recently bought large amounts of wheat. However, wheat importers are worried because of the prices. How much will wheat export prices rise? Which factors will drive the markets? How is the wheat supply outlook for Russia, the world's largest wheat exporter? We asked these questions to Andrey Sizov, managing director of Russian agriculture consultancy SovEcon, one of the most reliable analysts of the grain markets. SovEcon is the oldest research firm focused on Black Sea grain markets providing consistent data and accu- rate analysis of the region helping funds, traders, buyers and miller to trade better or manage their risks. (More info: sizov.report) Stating that bad weather and Russia’s wheat export tax affected the wheat production negatively, Sizov expects that Russia will produce 75.5 million tonnes of wheat this season, below-average for recent years. “We also expect a substantial decrease around 1 million hectares decrease of winter wheat because Russian farmers’ mar- gins are falling due to the export tax. I'm afraid if taxes stay, this trend will continue,” he warns. Also sharing his price scenario for the current season, “I think 2022 could be a more challenging period. We know more or less now how to deal with the COVID. But we have substantially higher prices for food grains, substan- tially higher wheat prices. While we have strong demand, there are some problems with the supply of wheat in the Northern Hemisphere. We also have some problems with freight and containers…I am afraid that big problems are ahead of us. In real terms global food prices just have returned to all-time highs, as per FAO. We saw similar high food prices at the end of 2010. The Arab Spring started in 2011” High prices, global food insecurity and smaller Russian wheat crops Three critical warnings for grain markets from SovEcon’s Andrey Sizov: Andrey Sizov CEO of SovEcon