IEG Vu is part of the Business Intelligence Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

This copy is for your personal, non-commercial use. Please do not redistribute without permission.

Printed By

UsernamePublicRestriction
UsernamePublicRestriction

Global Grain Geneva: Black Sea logistics functional, but in need of investment

Logistics bottlenecks remain in the Black Sea region

Despite Russia proving last season that its export infrastructure could handle a bumper crop, investment is still needed, panellists told Global Grain Geneva attendees.

Russia’s logistics infrastructure was expected to struggle under the weight of last year’s record crop, but there were no real logistics problems, Solaris Commodities director Swithun Still said in Geneva November 13.

“Last year we saw Russia had production of 85 million tonnes of wheat more or less, exports of 41 mln tonnes of wheat and [logistics] didn’t really suffer. There were some bottlenecks, the infrastructure of course creaking at some points,” said Still.

The main issue for Still is that Novorossiysk has three decent silos, but only one tunnel leading to the port. This creates bottlenecks, said Still.

“Yes, infrastructure is sufficient, but it’s getting to the point where - unless serious investment is made in infrastructure - we will have worse bottlenecks and poorer logistics,” said Still.

Plans are underway to deepen one of the berths at Novorossiysk from its current 11.8 metres to allow for full panamax vessels, said Still.

A difficult year

Logistically, comparing the current season in Romania to previous years is difficult as low levels in the Rhine and Danube led to volumes that would usually be handled by barge ending up on rail and road, said Cerealcom risk manager Thomas Deevy.

“The port [Constanza] is fine, it’s just about getting it into the port to process it. If it’s in the state’s hands, at least in Europe they can apply for European funding which would allow them to increase the rail to silos and improve the current infrastructure. If Romania is to grow at a steady rate it will require investment,” said Deevy.

Russia will need to rely on its own large banks, state and private, to support its infrastructure projects as sanctions prevent Russia from attracting investment from many international banks.

“Due to sanctions Russia has had to become more independent and look to its own resources to become food secure and import less – notably from the EU. Due to sanctions the Ruble has weakened and weak currency is good for exporters. With weak currency Russia has invested much more in their food sector,” said Still.

Stay tuned to IEG Vu for more coverage of Global Grain Geneva (November 13-15) and follow @GaryLeeHoward  on Twitter for live updates.

Related Content

Topics

What to read next

UsernamePublicRestriction

Register

CO223138

Ask The Analyst

Please fill in the form below to send over your enquiry or check the Ask The Analyst Page to find out more about the service

Your question has been successfully sent to the email address below and we will get back as soon as possible. my@email.address.

All fields are required.

Please make sure all fields are completed.

Please make sure you have filled out all fields

Please make sure you have filled out all fields

Please enter a valid e-mail address

Please enter a valid Phone Number

Ask your question to our analysts

Cancel