Russian Railways may cancel grain transportation discount in 2019

SOCHI/MOSCOW, Oct 3 (PRIME) -- Russian Railways may cancel its 7.1–10.3% discount on grain exports by railway in 2019 as the grain traffic has fallen considerably, Commercial Director Alexei Shilo told reporters late on Tuesday.

“We’ve issued the discount until the end of the year with the aim of maintaining the share of railway transportation. We will consider prolongation for the next year in accordance with the rules. If cargo senders are ready to keep their volumes on the railway, we will be ready to consider discounts,” he said, adding that the company registered a year-on-year decrease in grain traffic in August–September.

“I mean that volumes are falling. So, the discount may not be interesting for us…We received an official letter from the Agriculture Ministry that the grain harvest will fall this year. Taking that volume into the account, we expected our railway traffic to remain flat on the year.”

The Federal Service for Veterinary and Phytosanitary Oversight said in a statement that several grain loading terminals in the Krasnodar and Rostov regions may stop their operations due to poor phytosanitary conditions.

The two regions account for the bulk of Russia’s grain exports, and 62 companies transship grain via nine ports of the two regions. But inspectors of the service discovered serious violations of phytosanitary regulations by about 30 companies, and may order them to stop operations for up to 90 days if they fail to eliminate the violations.

“The service ordered its regional departments to improve control over quarantine and phytosanitary conditions of unloading facilities in the Krasnodar and Rostov regions, and also to hold a second inspection of grain loading facilities in the regions,” the service said.

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