By Alexander Miller, consultant in emerging markets – Eurasia Business News, August 23, 2022

The Russian company “Sovecon”, which specializes in the study of agricultural markets, estimates the wheat exports from Russia in July-August 2022 at 5.9 million tons, which is the minimum figure since the 2017-2018 agricultural year, reported TASS press agency and newspaper Kommersant.

Sovecon estimates Russian wheat exports in July-August, the first two months of the 2022-2023 agricultural season, at 5.9 million tons. This is 27% lower year-on-year and is the lowest volume since the 2017-2018 agricultural year.

Exports remain sluggish, as prices for Russian wheat remain too high compared to other suppliers, primarily from the European Union. A strong ruble does not help. Exporters may face problems later in the season due to worsening weather conditions in the Black Sea in winter and the seasonal shutdown of river navigation. In addition, in February 2023, it is expected that Russia will introduce an export quota that may limit export flows.

They noted that the increased prices in Russia reflect the problems faced by Russian exporters, including those related to export duty and high production costs. In 2022, a record high wheat harvest will be harvested in Russia, which, according to Sovecon estimates, will be 94.7 million tons.

Read also : Wheat Prices Rise Again, Amid War in Eastern Europe

Russian wheat exports may accelerate in the short term due to falling prices in the domestic market and/or higher global wheat prices. We believe that the Russian domestic market is far from the bottom, while there is a high probability that the world market has already overcome it“, said the head of Sovecon Andrey Sizov. 

Demetra Trading, one of the three largest Russian grain exporters and partially owned by Russian bank VTB, plans this season to sell about 250 thousand tons of grain in the domestic market for local producers of flour and animal feed. 

On May 17, 2022, at trading on the European exchange Euronext, the cost of a ton of wheat reached € 435. On May 11, 2022, on the Chicago Mercantile Exchange, prices for milling wheat approached $ 400 / ton. The reasons for the increase in the cost of grain are the consequences of Western sanctions against Russia, as well as the abnormal heat in India, the second largest wheat producer.

In 2016, Russia became the world leader in wheat exports (25 million tons), followed by the United States (24 million tons), Canada and Australia (20 million tons each), Ukraine and France (18 million tons each).

In 2017, Russia exported 33 million tons of wheat.

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