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The grain market

Grain is one of the leading areas of agricultural sector, which is of strategic importance in ensuring food security. Therefore, the grain economy related to the sphere of plant growing satisfies the needs of the population for bread and bakery products, making up the basis of agriculture. The corridors "Baku-Tbilisi-Kars" and "North-South" will allow doubling the volumes of rail transportation between Russia, Azerbaijan, Turkey, Iran and Georgia. The most promising can be grain transportation in the direction of Russia-Iran, Russia-Georgia and Russia-Turkey. Import potential of Azerbaijan is estimated at 1.3-2.0 million tons per year. The export of grain from Russia to Azerbaijan is transported by rail.

Trade of wheat in the world estimated at 160 million tons, for the 2016-2017 season in the world was produced 745 million tons of wheat, 735 million tons of which was its consumption. Azerbaijan has taken important steps in this direction. In our country, among cultivated agricultural plants, soft and hard types of wheat considered traditional. For January-November of 2017, the production of grain in Azerbaijan increased by 22.9% compared to the same period of the previous year. This was reported in the State Statistics Committee. The price of grain in February compared with January, increased by 2.4 points (1.6%), and compared with February of last year by 3.7 points (2.5%) and an average of 150.6 points.

Globally, the cumulative amount of the crop expected to reach 991 million tons, which is 4% higher than in 2015/16 year. It is predicted that the indicator of world trade will amount to 181 million tons of wheat, which is 8 million tons more compared to last season.  World wheat consumption expected to reach 741 million tons, an increase of 4% compared to 2015/16. If forecasts are made, global wheat stocks are expected to increase by 4% compared to 2015/16, with a production volume of 250 million tons. In accordance with this, the ratio of world reserves to consumption will be at the level of 34%.

Expected volume of wheat stocks in China, compared with the index over the past 5 years, increased for 60% amounting 111.0 million tons. Compared with last season, in the exporting countries, the volume of balances at the beginning of the year will decrease by 2 million to 63 million tons, and the volume of wheat production will increase by 24 million. Thus, for the main export countries, the overall supply level will be 22 million tons more. The output of groups of countries in the Black Sea region will increase by 10.1% to reach 132 million tons, the volume of exports will increase by 3.9% to reach 53.4 million tons.

Turkey has traditionally been one of the largest importers of Russian grain. According to the Federal Customs Service, in 2016 more than 4.6 million tons of Russian grain sent to Turkey. On March 15, Turkey abolished duty-free import of Russian agricultural raw materials. Because of this shipment of wheat, corn, sunflower meal and butter were suspended. It was assumed that the tax would be 130% for all products, but later 130% was imposed for wheat and corn, 45% for rice, 36% for sunflower oil, 13.5% for sunflower oil, 9.7% for beans. The Ministry of Agriculture of Russia stressed that Ankara's adoption of such a decision could lead to a complete cessation of imports to Turkey of Russian wheat, corn, unrefined sunflower oil, sunflower meal, beans and rice.

·        Grain production in 2017/18 is expected to be 3% below the record level of the previous season, primarily due to the decline in the wheat and corn sector

·        Given the projected increase in consumption, the passing stocks of grain in 2017/18 should reduce, but their volume will still be the second largest in history.

·        In 2017/18, a slight decline in grain trade expected, given the decline in wheat, corn and sorghum.

·       The world rice harvest in 2017/18 expected to reach a new record level, although low world prices may force farmers to refuse to plant this crop in some exporting countries.