‘There is an overproduction of grain in the republic, but there are very few sales windows’
At AgroVolga exhibition, Rustam Minnikhanov inquired about grain prices and praised the investor of the grain hub in Sviyazhsk
“The launch of the Sviyazhsky and Bugulminsky terminals will lead to an increase in the purchase price of grain by at least a thousand," Alexander Uskov, CEO of August Group of Companies, outlined the secondary effect of new elevators in Tatarstan at Agrovolga exhibition on 4 July. By the beginning of harvesting, the Russian agricultural producer had managed to build the Sviyazhsk-Zernoprodukt elevator complex with a capacity of 500 thousand tons, which will make it possible to export a third of the harvested grain. Krasny Vostok Group is showing interest in joining the project. The exact composition of future residents will be determined by the beginning of August, when the Ministry of Agriculture and Food of the Republic of Tatarstan will agree on transshipment tariffs.
Excess 1.5-2 million tons of grain almost crushed the market
The elevator complex Sviyazhsk-Zernoproduсt on the water turned out to be the focus of attention of farmers. Rustam Minnikhanov, the rais of the Republic of Tatarstan, did not have time to return from a working trip to the Sviyazhsky multimodal complex, as during the tour around the international agro-industrial exhibition Agrovolga, he stopped again near the exposition of August holding. He was interested in how the purchase price of wheat changes within the country. What are the forecasts for price situation on the world grain market? The group's CEO, Alexander Uskov, said that the price had increased slightly, to 11-12 thousand rubles per ton. He assured that after Sviyazhsk the construction of a second terminal in Bugulma worth 4 billion rubles would continue.
Later, in a conversation with Realnoe Vremya, the entrepreneur explained that the launch of two elevators would lead to an increase in the purchase price of grain by at least a thousand or two — up to 13-14 thousand rubles per ton.
“Now the price of grain can be different, but it is especially volatile in the republic," he noted. Purchase prices were kept at a catastrophically low level in winter, when they fell below 10 thousand rubles per ton.
According to Uskov, the decline is associated with the overproduction of grain in the republic: “According to our estimate, about 1.5-2 million tons of grain is excessive. This mass “presses” on the market, as the sales are complicated. There are few shipping windows in the republic," he called the reason for the overstocking of the local market. On the other hand, such situation is beneficial to those who purchase grain for bird feed at dumping prices. “And those who are engaged in crop production are having a very hard time," he breathed.
Breakneck speed — up to 1 thousand tons of processed grain per hour
He calls the elevator complex Sviyazhsk-Zernoproduct, built this year, a sales window for export. Its throughput capacity is 500 thousand tons. “We are not going to store grain there: the most important thing for the elevator is the turnover rate. It is loaded and unloaded at the same time. The speed is up to 1 thousand tons per hour," Uskov said. The holding is going to load the elevator with 30% of its own grain and leave the remaining 70% for other agricultural producers. This will make it possible to export a third of the harvested grain.
The contractual campaign with residents begins in the coming days. So far, the management company of August-Agro terminal is forming a route network.
Entering the Baltic Sea
In Sviyazhsk, there has been a meeting of farmers with the management of Port Vysotsky company, the first grain terminal in the Baltic, opened last year, Uskov said. According to him, 0.5 million tons of grain can be shipped from the Tatarstan terminal, while the management of the facility in the Leningrad Oblast is making plans to reach the mark of 4 million tons in grain transshipment.
“Different logistics routes are being considered — both by water and by rail. If we choose the main route to Vysotsk, from there we will be able to sail around the world through the Black Sea, the Caspian Sea and the Azov," Alexander Uskov relies on the sea. Currently, the technical shipment of grain into wagons is underway, and the elevator itself has been built, commissioning works are underway. They mainly ship grain from last year's harvest.
Railway routes are also also being tested. According to him, Russian Railways provided the company with a passport for the organisation of overland transportation. The head of August finds it difficult to say which way will be the most effective. The Ministry of Agriculture and Food of Tatarstan promises to agree on tariffs by the end of July.
The construction of the grain terminal in the Sviyazhsk multimodal complex began in the summer of 2022. Investments amounted to 2.4 billion rubles. The Single-Industry Towns Development Fund provided a preferential loan in the amount of 10% of the costs, the rest is the company's own capital. Besides, a second complex is being built in Bugulma — the twin brother of the Sviyazhsky elevator. It will be located next to the city on a new site, being built entirely from scratch. Investments in the Bugulminsky elevator will amount to 4 billion rubles. The increase in price is due to the construction of a railway with a separate station, explained Aydar Galyautdinov, the director general of August-Agro Management Company PLC. The launch is scheduled for the third quarter of 2025.
Will Krasny Vostok switch to Sviyazhsk?
Krasny Vostok Group of Companies, which has its own port elevator on the territory of the Kazan River Port, may become one of the first “residents” of the grain hub. “As a rule, not all ships enter Kazan, where our elevators are located," said Adel Khairullin, the head of the group of companies. “And all market participants can work with this terminal, which is a plus for the republic.” The interlocutor of the publication did not say what future awaits the Kazan elevator in connection with the renovation of the riverport.
According to him, the main difficulty in developing exports from Tatarstan is related to logistics. The railway's capacity is limited due to external factors. “For example, we shipped grain sold in September in March, whereas before we shipped it in October. It would seem that it is possible to work by water, but there is not enough fleet. We will have to rebuild the river fleet and think about the railway tracks," he argues.
The Group exported about 55 thousand tons of grain. “Grain exports are high for those companies that have trading houses in foreign countries. We don't have them, we work through them. This year, this share is 30-35%," said Adel Khairullin. Certainly, each producer has its own terminal, but the new hub will increase the volume and speed of grain transportation, agricultural producers believe.
Tatarstan does not export much grain yet. According to the Ministry of Agriculture and Food of the Republic of Tatarstan, 108.8 thousand tons of grain were exported last year, including 79.7 thousand tons of barley, 20.5 thousand tons of corn, and 2 thousand tons of wheat. The volume of transactions amounted to $19.4 million, Minister of Agriculture and Food of the Republic Marat Zyabbarov said at a briefing. But since the beginning of this year, exports have accelerated, and from April 22 to the present, almost 60 thousand tons of wheat and 113.2 thousand tons of barley have been shipped. Saudi Arabia, Libya, Egypt and Algeria became the main buyers of Tatarstan grain. At the end of the tour, Rustam Minnikhanov handed over the keys to ten mobile stalls to the regional branches of Tatpotrebsoyuz.