Wheat production in Russia has increased by 80% in the past five years and has been a major factor in the continued oversupply of world grain markets, grain traders were told at last week’s Barnett-Hall conference.

In his speech at the event, Dan Basse, president of Chicago-based research firm AgResource, said grain markets remain over-supplied and, although demand is increasing, it is not enough to significantly alter the supply-demand imbalance.

He suggested there would be no further downward movement in grain markets and pointed out that climate has become more unpredictable and a weather event could reduce supply. “There could be weather scares in South America, Russia or the Black Sea. Russia has never had eight good years in a row,” he said.

Russia-based grain sales specialist Richard Valentine Willows said favourable weather for the past seven years, along with increased acreage, has led to the sharp increase in Russian grain output. “Since 2010, weather has been fantastic; it has made the biggest difference,” he told delegates.

Russia is responsible for 21% of world wheat exports and both speakers said Russian exports of 42m tonnes were at their upper limit due to limitations with transport infrastructure, particularly at ports and railways.

Basse said there has never been a point in history when the world has produced as much food. “The only way farmers will not farm is if someone pays them not to. Not one government today has a programme to set aside land, which probably needs to happen,” he said.

He said the next significant upward lift in agricultural markets would come from increases in population size and affluence in Asian countries such as India, Pakistan, Bangladesh and Vietnam.

Basse said growth in the Chinese market is slowing as the average daily calorie intake in China is currently 3,000, just 400 behind developed regions such as the US and EU.

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