Company news

KZP-Expo introduces new items in export product portfolio

Krasnodarzernoprodukt-Expo completes the crop year 2010 with a considerably enlarged export product portfolio in spite of complicacies in agriculture caused by a fierce draught in Russia last summer. Before the grain embargo imposition the company exports predominantly comprised of milling and feed wheat. Today a dozen of other agricultural commodities not covered by the ban have been successfully traded outside Russia.

Grain export ban jeopardized KZP-Expo business similarly as it affected all other Russian grain exporters. To stay in the world soft commodities market the company decided to diversify its export portfolio and introduced for export paddy rice, milled rice and wheat flour (allowed for export from last December).

While KZP-Expo had used to trade rice to CIS countries, the first shipments of paddy rice to destinations outside CIS took place last autumn, of milled rice and wheat flower - in spring 2011. Markets of supply for the new items are traditional: North Africa and Middle East. KZP-Expo's entry in the world market of rice and wheat flour became possible due to favorable world market situation and KZP-Expo's benefitting integration with Krasnodarzernoprodukt Group.

KZP-Expo refrains from setting sizable targets for its flour export program as demand for Russian flour may well shrink after the grain ban lifts from July 1st. The company is more definite about its rice export ambitions and declares a 10% target share in Russian rice exports for crop year 2010 and up to 18-20% in 2011.

KZP Group has brought the area of cultivated farmland to 30 K hectares over the last year, of which 40% are rice systems. This allows reinforce the rice segment and produce up to 70 K tons of paddy rice within the Group only (equal to 7-9% of all-Russian rice harvest). The company expects to fully load its rice processing plant in Krasnodar, milling rice for domestic market and for current export milled rice contracts.