Anatoly Kutsenko, a director at the Russian ministry of agriculture, said the country was mulling downstream investment into flour mills. The statement shows Moscow considers exporting low cost grain may not be the best way to proceed.

Russia needs to develop flour production capacity and increase its consumption of higher-quality wheat to sustain the nation’s bumper crops, a senior official said. In one of the first public signs of an admission from Russian state bodies that exporting low cost grain may not be the best way to proceed, Anatoly Kutsenko, a director at the ministry of agriculture, told industry figures the country was mulling downstream investment into flour mills, AgriCensus reported. In addition, regionally-led plans to boost the consumption of higher-quality 12.5% protein wheat in the domestic market should be made, he said. Russia’s higher grade product has typically found its way onto the international market as lower-quality grades have been used at home. Russia harvested 139.3 million tons of grain last year, 14.7 million tons higher on the year, beating 1978’s record harvest of 127 million tons. Kutsenko also warned there would be no reprieve in Russian expansion into the wheat markets. “Farmers should not be afraid of a record harvest. The fear of a big crop must be overcome,” Kutsenko told the audience, suggesting Russia’s recent record-breaking wheat harvests are seen favourably in Moscow and are likely to become the new normal. Total 2017/18 wheat sales have now topped 23.3 million mt, up 35% from the same stage last year, while sales from the EU, Ukraine, and the US have all shrunk over the same period. Russian grain sales have seen an increase in volumes to almost all destinations around the world over the course of the marketing year. For example, Sales to Turkey have seen the biggest absolute gain, up 1.66 million mt from last year to 3.74 million. According to Russian logistics operator RusAgroTrans, Russia will export 47.2 million mt of grain in the 2017/18 marketing year.