• Improved weather conditions in early 2021 benefited soil moisture for winter crops
• Above-average cereal production obtained in 2020
• Total cereal exports forecast above average in 2020/21
• Export prices of wheat increased until January and stabilized in February
Improved weather conditions in early 2021 benefited soil moisture for winter crops
Planting of the 2021 winter crops, mostly wheat and barley, was completed last October and the area sown is set at an above‑average level of about 19 million hectares. Warmer and drier‑than‑average weather conditions in December 2020 raised concerns for crop development, but abundant snow and rainfall amounts in January and February 2021 improved soil moisture levels.
Planting of the spring crops, mostly wheat and maize to be harvested in August and September, is expected to begin in April. The area planted with spring wheat is expected at a below‑average level as a consequence of the introduction of a floating tax on wheat exports, from 2 June 2021, which would reduce the crop’s profitability ( FPMA Food Policy ).
Above‑average cereal production obtained in 2020
Harvesting of the 2020 cereal crops was completed last September and the aggregate cereal output is estimated at about 130 million tonnes, 13 percent above the five‑year average. Following record high plantings, wheat and maize outputs are officially set at above‑average levels of about 86 and 14 million tonnes, respectively. Barley production is estimated at 21 million tonnes, 10 percent above the average due to high yields.
Total cereal exports forecast above average in 2020/21
Aggregate cereal exports in the 2020/21 marketing year (July/June) are forecast at 47.4 million tonnes, 12 percent above the five‑year average volume. Wheat shipments, accounting on average for 80 percent of the total cereal exports, are forecast at 39 million tonnes, well above the average level on account of the large output obtained in 2020 and strong demand from importing countries. Barley exports are foreseen at 5.5 million tonnes, slightly above the five‑year average.
On 14 December 2020, the Ministry of Economy set a 17.5 million tonne quota on exports of wheat, maize, barley and rye to countries outside the Eurasian Economic Union (EAEU), for the period from 15 February to 30 June 2021, with the aim of ensuring adequate domestic availabilities and halt a sustained upward trend in domestic prices ( FPMA Food Policy ). With the same purpose, a series of taxes on exports of wheat, maize and barley were introduced since late January 2021 ( FPMA Food Policy ).
Export prices of wheat increased until January and stabilized in February
Export prices of milling quality wheat increased between September 2020 and January 2021, mainly due to strong demand by importing countries. Prices remained stable in February as the upward pressure on prices provided by the announcement of the introduction of the floating tax on wheat exports was outweighed by the strong competition in the export market. Prices in February were at levels 30 percent above those a year earlier.
In the domestic market, wholesale prices of milling wheat slightly declined between December 2020 and February 2021 but remained well above their year‑earlier levels. A year‑on‑year weaker local currency contributed to the annual increase of both export and domestic prices.
Retail prices of potatoes, another important food staple, have been following seasonal trends: after decreasing between July and October 2020, they increased from November 2020 to February 2021, reaching levels well above those a year earlier.
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