Russian railway grain handling up 16% following record crop

Grain loadings on Russia’s railways system reached 19.6 million mt in the year to November, 15.7% higher than last year data from Russian Railways showed Friday.

With Russia’s grain crop looking to touch as much 140 million mt this, up 12% higher on year and even greater than the previous record of 127 million mt set in 1978.

The increase in capacity comes at a time when Russia’s railways are shipping more and more, with total network traffic up 3% over the course of 2017, while November freight was 5.7% higher than at the same stage last year.

A lack of storage capacity has meant Russia has been unable to make use of the state intervention fund, an annual buying campaign designed to provide price regulation by buying up excess grain from farmers in times of plenty. Instead, the Ministry of Agriculture opted to subsidise rail transport earlier in the year, giving greater impetus to move this year’s crop out of the country.

But the increase in railway freight and the size of this year’s grain crop has led to fears of bottlenecks across Russia’s transport network, with sellers looking to foreign markets for their bumper harvest.

Speaking on national television on Thursday, Russian prime minister Dmitry Medvedev admitted a need to increase investment in logistical capacity if it is to cement its place as the world’s number one grain exporter.

Although the railway network is coming under increased pressure from higher demand, it is not the weakest link in Russia’s export chain.

“While it is a common opinion that there are bottlenecks on the Russian railway system from this year’s grain crop, this is not a new phenomenon, it is always like that,” a logistics analyst told Census.

“The wagon deficit could affect things, but really you have to look at the loading in the ports. They are at maximum capacity.”