Russia’s Increased Grain Exports Stretch Railway Track Capacity

Increased Russian grain exports stretched the capacity of the country’s railways to haul the cargoes to ports, the government said.

Transportation of grains for export by railway grew about 50 percent in July through October compared with the same period in 2009, Andrey Nedosekov, deputy transportation minister, said at a teleconference in Moscow today, without providing figures. Russia banned grains exports last year after the country’s worst drought in at least a half century.

Grain exports were 3.5 million metric tons in August and 3.7 million tons in September, records for those months, said Oleg Sukhanov, a grains analyst at the Institute for Agricultural Market Studies, or Ikar. The shipments declined to 2.8 million tons in October, he said today by phone in Moscow.

Grain companies ordered railcars from private and state operators to haul 2.74 million tons of grain in October, and about 1.99 million tons were transported on tracks operated by OAO Russian Railways, the state rail monopoly, according to a government statement distributed to journalists during the teleconference. Companies have made bookings to move 2.34 million tons this month, of which 410,000 tons have been transported.

The railway operates 32,000 grain railcars, of which up to 4,000 are deployed in Kazakhstan, Nedosekov said. Delays in loading and unloading cars, as well as insufficient handling capacity at ports, effectively reduce the network’s capacity, according to the government statement.

Russia’s ports can handle 28.9 million tons of grain a year, according to the government. Novorossiysk and Tuapse on the Black Sea can process 10 million and 2.4 million tons a year respectively, limiting the country’s grain export flows, the government said. The remaining exports are shipped from shallow ports on the Volga and Don Rivers and the Azov Sea, which are prone to freezing in November and December, prompting a slowdown of Russia’s grain shipments in the second half of the season.

To contact the reporter on this story: Marina Sysoyeva in Moscow msysoyeva@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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