| |
DANCES WITH BEARS
Grain, grain,
everywhere
By John Helmer
With
grain exports likely to reach 8 million tonnes this
year, Russia's ports admit that they are having trouble
coping. This is forcing the government in Moscow into
deciding whether or not to continue favoring Russian
over Ukrainian and Baltic ports, at the risk of letting
the grain surplus eat into farm prices, farm income, and
planting for next year. Watch carefully, and you will
see how agile the Russian government can be in trading
favors with powerful constituencies at the start of an
election year.
The strongest pressure from
Russia's current grain boom is being felt at
Novorossiysk, on the Black Sea, the traditional hub of
Russia's grain trade because most of the export grain is
produced in the Krasnodar and Rostov regions to the west
of the port; usually, Novorossiysk ships half or more of
Russia's grain exports.
Executives at the
Novorossiysk port company confirm that out of the more
than 2 million tonnes of grain exported from Russia in
the first six months of this year, about half went
through the port. St Petersburg port reports grain
shipments totaling 621,700 tonnes in the same period,
while an equivalent volume went through the small
southwestern Russian ports of Taganrog, Azov, Yeysk and
Rostov.
This year's windfall for Russian barley
and durum wheat producers coincides with droughts in
North America and Australia, which have affected
production in these countries. After several years of
poor harvests, net imports and grain aid (1999), Russia
exported 7.2 million tonnes of grain last season (July
2001 to June 2002). Official forecasts for this season
range between 8 and 10 million tonnes.
Russian
port capacity, meanwhile, for the shipment of grain is a
maximum of 5 million tonnes per annum. Rudolf Bulavin,
an analyst with a major grain trading company in Moscow,
said that at present Russian ports accounted for about
75 percent of grain shipments; 15 percent moved through
the Ukrainian ports of Odessa and Ilyichevsk, and the
remainder through Baltic ports, notably Muuga in
Estonia.
"Russia is trying to do its best,"
Bulavin said, "to export the grain to western Europe,
the Middle East and North Africa, where there is a
deficit of grain now. The price difference between the
domestic market and export markets makes it possible to
ship grain both by large vessels from Novorossiysk, and
smaller river-sea type vessels from the Azov and Don
ports. However, nobody can say whether grain
transportation by smaller vessels will be effective next
year."
The volume available for shipment has
caused rail and terminal storage problems at the ports,
he conceded. "The problem of chartering vessels for
grain exports is only a matter of price," Bulavin says.
"While the average charter rate is $17 to $23 per tonne
for transportation to Europe, if the exporter pays more,
he can easily get a vessel."
Alexander
Filimonov, spokesman for the federal Transport Ministry,
acknowledges that the mid-size ports on the Sea of Azov,
such as Taganrog and Azov, are handling the grain
exports, but these ports and the river ports on the
Volga and Don channel, such as Rostov, can only cope
with smaller vessels; Novorossiysk can currently work
with vessels of up to 50,000 tonnes in grain capacity.
"The smaller shipments of grain using river-sea
type vessels are not always profitable," Filimonov said,
"and of course, they are always less profitable than
larger shipments made through Novorossiysk. But one of
the obstacles there is that grain transportation is not
a highly profitable operation for stevedore companies,
given the low tariffs for grain re-loading. This is why
the stevedore companies are not very active in investing
in the construction of specialized grain terminals in
the ports."
Under pressure from farmers to keep
grain prices from falling precipitately, the Russian
government has decided to encourage exports by
introducing a 20 percent rail freight discount on
shipments of grain to Ukraine and Baltic ports. This
reverses a year-long policy of the government, using
customs bans and other red tape, to drive shippers of
Russian export cargoes to use Russian ports instead of
non-Russian ones.
The Transport Ministry says
that this a temporary expedient, and that for the long
term it would like to encourage domestic port companies
to expand their grain storage and loading capacities. A
source at a Novorossiysk port company told Asia Times
Online that it was currently expanding four berths on
wharf 3, to be used for grain vessels up to Panamax
size. The water depth is 13 meters. By next year, the
source said, grain transportation volume should be up to
3 million tonnes per year. It could go higher, he added,
if the Rail Ministry improved access to the port.
Bulavin warned, however, that "in the absence of
a clearly stated policy of the government, it is hard to
make any plans for construction of new grain terminals.
The government hasn't announced whether it will be
supporting meat production in Russia. That is why it is
impossible to say what domestic consumption of grain
will be in future. It is possible that next year the
grain harvest will be not as big as this year, and
Russia may become a net importer of grain again. In this
situation stevedore companies cannot predict whether
their investment into new grain terminals will pay for
itself."
Anna Vostrukhova, spokesman for
Severstaltrans, explains that until this year Taganrog
port had not handled grain. Severstaltrans is the
national transport company that controls Taganrog and
Tuapse ports in the south; Vostochny in the east, and
which is building up its stake in St Petersburg in the
north. Currently, she said, grain exports amounted to
over a quarter of the cargo transported through
Taganrog. During the first half of the year, Taganrog
port said that it transported over 800,000 tonnes of
cargo; out of that, grain amounted to 210,000 tonnes.
The maximum throughput of grain through Taganrog is
60,000 tonnes per month. Vostrukhova adds, "At the
moment, grain exports constitute a good addition to
Taganrog's traditional business, and the port is working
on improving its technology for handling grain. Right
now this involves loading from trucks to vessels."
According to a Transport Ministry spokesman,
Novorossiysk, St Petersburg and Vladivostok are all
modernizing and expanding their capacities for grain
transportation. He predicts that as a result of this
expansion, they will add 30 percent to 60 percent more
capacity for grain throughput. That's a potentially
costly risk for commercial Russian companies to run as
they will have to count on Russian farms to deliver
consistently high harvests in the near future.
The spokesman adds that a plan is on the drawing
board to build a grain terminal at the new Ust-Luga port
on the Gulf of Finland, near St Petersburg. The
intention would be to compete against Muuga, which has a
current capacity to handle 5 million tonnes of grain per
year; the Estonian port was the largest of the
Soviet-era ports for grain. The Ust-Luga move is part of
the Transport Ministry's determination to ship Russian
cargoes through Russian ports. But the ambition is a
costly one, and though Ust-Luga's grain terminal has the
backing of a large semi-state agribusiness group,
construction of the facility isn't likely for several
years, the spokesman concedes.
In the meantime,
grain exporters such as Australia, Canada and the United
States are adamant about restricting, if not
eliminating, the price support for grain farmers that
the Russian government believes it must maintain to
encourage planting, and to protect the harvests of the
future. This is one of the biggest obstacles to Russia's
accession to the World Trade Organization (WTO). And
it's one of the reasons the Russian government is
quietly relegating WTO membership on its list of
priorities.
(©2002 Asia Times Online Co, Ltd.
All rights reserved. Please contactcontent@atimes.com for
information on our sales and syndication
policies.)
|
| |
|
|
 |
|
