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Konstantin Y. Smolentsev
SMOLENTSEV & Partners » Press Centre » Inverviews & Comments »

Agri-market needs grain balance

In the region center I International Agrarian Forum “Innovations in agribusiness (plant growing)” is continuing its work, which, we shall remind, opened today at 10 a.m. in “Tyumen” hotel. 

The first one to welcome everyone at the opening was Konstantin Smolentsev, Chairman of the Board of Directors IC “SMOLENTSEV and Partners” (Canada). Then he passed on the word to the General Director of GC “AgroIntel” (Russia) Andrei Chalkov, who wished everyone pleasant communications time and productive work on the forum. Right after that Assistant Governor, Director of AIC Department Vladimir Kovin took over the stage.

Participant of the forum from Canada Elena Settles, Director of CERBA-Moscow (Canada Eurasia Russia Business Association) has made a presentation. As she has noticed, the main thing is that meetings of Russia and Canada representatives are being carried out. “In any cooperation of countries, especially in such huge sector as agribusiness, establishment of good and kind contacts on long-term prospect is important. Certainly the fact that in past 10 years Russia hasn’t been actively cooperating with Canada, does not promote fast establishment of contacts. But, nevertheless, Russian delegations have been coming to Canada on a regular basis, and Canadian representatives come here. In the near future, we’re expecting Minister for Economic development of Quebec, which is also a positive factor, because to establish close contacts, to sign contracts and to organize joint ventures and projects it is very important to know as much as you can. It is the beginning of good, warm and mutually advantageous relations”, – she said.

One of the main presenters on the forum was the President of Russian Grain Union Arcady Zlochevsky. Theme of his report was rather volumetric and sounded as “Analysis and prognosis for development of world, Russian grain markets today and for short term perspective.” In detailed presentation, which lasted approximately an hour, he showed map of famine and noticed, that surpluses of Russian grain can be used for humanitarian programs (as, for example, USA does it), told about conditions of market of wheat, corn, rice and barley, stopped on a problem of shortage of wagons to transport grain and noted, that this year role of the government in regulating market will increase even more.

Later, at a briefing, Zlochevsky talked in more detail about certain aspects of his presentation. So, for instance, when touching topic of relations in agribusiness between Russia and its neighbors – Kazakhstan and Ukraine – Zlochevsky has noted that today’s competitive relations destroy price policies of these countries. “Price is formed at the level of Black Sea fobbing, and that side wins deliveries which offers the highest price. Russia is not grading by quality, in wheat market we are in one segment. Accordingly, three countries are compelled to interrupt each other, offering lower price. Russia, Kazakhstan, and Ukraine are suffering from it”, – explains Zlochevsky.

As he said, at some point to the government of three countries it was offered to organize some sort of a grain OPEC. Then, within the limits of general agreements it would be possible to stabilize situation and together compete with America and Europe. “Although right now there’s almost no chance to create such agreement due to political motives. We won’t be able to agree with Ukraine. If it was possible, Ukraine would send grain on export, because they have the most opportunities, port infrastructure. We would fill Ukraine’s demands in grain due to our resources, and Kazakhstan would consequently fill ours. In this case savings would be in all three countries”, – Zlochevsky thinks.

He also noted, that it is necessary for Russia to revive manufacture of high-quality wheat which was carried out long time ago, but now by virtue of absence of demand it has been lost. Zlochevsky has told, that more than 80 % of deliveries of grain on export is wheat 4th class which also mixes up with fodder wheat. Such grain — low standard, goes on markets of Northern Africa, Southeast Asia, Near East. "This market will still be ours, and wheat of such quality will be in demand. But there’s also another market – premium wheat of high quality, which we haven’t mastered yet, but we have set a goal to do so. For now this market belongs to Americans and Canadians”.

Speaking of general perspectives for development of Russian grain market Arkadiy Zlochevsky has noted that right now it is primarily important to find ways of grain balance, including world market. Then it would be possible to satisfy interests and manufacturers in maintaining certain price level, and consumers, so that their interests are not restrained.

Konstantin Smolentsev at the end of the event has noted that such International forum will become annual. And it would be carried out in Tyumen and Zavodoukovsk.

Author: Galina Kononenko , Maria Luzgina

Publication address in Internet: http://www.vsluh.ru/news/economics/147945.html

Internet-newspaper "Vsluh.ru", 07/31/08
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