Wheat exports from Russia have reached a peak
2022.12.07 08:33
Wheat exports from Russia have reached a peak
Budrigannews.com – Analysts and an association of exporters stated that if disruptions caused by storms in Russia’s primary sea route, the Black Sea, are limited, then wheat exports from the world’s largest supplier will approach record levels in December.
However, due to complications brought on by Western sanctions imposed on Moscow, Russia is likely to export less during the entire 2022/23 July-June marketing season than its enormous crop might allow.
Despite the fact that grain is not the focus of the restrictions, officials from Russia have stated that grain exporters have found it more difficult to process payments in banks, obtain vessels, trade finance, and insurance due to sanctions imposed on the Russian financial sector as a result of what Moscow calls a special military operation in Ukraine.
Wheat exports will rise by 2% in the first half of the season, thanks in part to this year’s record crop, according to Russia-focused Sovecon consultancy.
“Russian grain exports are slowly returning to normal after much publicity about the hidden sanctions and intervention of the international community,” the Russian Union of Grain Exporters trade group said on social media on Wednesday.
The association added that Russia’s total grain exports, excluding supplies to Kazakhstan, Armenia, and Belarus, are anticipated to reach 26 million tonnes between July and December, a 10% increase from a year ago.
“This is certainly not bad, but the current season has much more potential. Ideally the [current] drop in worldwide costs will help interest and the debilitating of the rouble will further develop deals edges.”
In 2022, Russia is expected to harvest a record-breaking 150 million tonnes of grain, including 100 million tonnes of wheat.
The group says that the problem for the second half of the season, from January to June, will be problems processing payments if Western sanctions are increased.
Egypt and Turkey are typically the biggest buyers of Russian wheat, but there are no official figures this year because Moscow stopped publishing its export and import data to stop “speculation” after sending troops to Ukraine on February 24.
According to a note from analysts at the Russian rail operator Rusagrotrans, Russia has sold more wheat to Saudi Arabia, Algeria, Pakistan, Brazil, and Mexico since the beginning of the season on July 1.
Rusagrotrans added that Russia also resumed wheat deliveries to Iraq after a ten-year hiatus.
SANCTIONS CAUSE SOME LOSSES Sovecon and another consultancy, IKAR, estimate that 4.0-4.2 million tonnes of wheat will be exported in December.
Sovecon noted that Russia exported 4.3 million tonnes of wheat in November, which is close to the record of 4.3 million tonnes set in December 2017.
It also said that storms made it harder for ships to load into ports last week, which caused some traders to temporarily stop buying from farmers in Russia’s south.
IKAR stated, “We could repeat the figures from November, but bad weather in ports will most likely prevent it.”
Wheat exports in a half-year will amount to approximately 23.5 million tonnes if this is true. It will still technically be possible to achieve our seasonal goal of 44 million tonnes, but it will be very difficult.”
Sovecon anticipates that Russia will export 22.9 million tonnes of wheat between July and December, which is the same as the average of the previous five years and is up 2% year-over-year. It estimates that Russia will export 56.1 million tonnes of grain in 2022/23, including 43.7 million tonnes of wheat.
After a slow start to the season, the state-controlled trader United Grain Company now anticipates that Russia will export 53-54 million tonnes of grain in 2022/23, according to deputy head Ksenia Bolomatova.
She added that they would exceed 60 million tonnes if sanctions-related curbs were not in place.
