Russia has consistently been ramping up its wheat exports to global markets as part of the government’s effort to revive the country’s agriculture with the state and leading companies pouring money into the sector amid the sanctions that have cut food imports.
A weak ruble and poor crops in Germany and France have also been a factor in Russia’s record wheat exports, including to countries it has never sold grain before.
Russian wheat export hits new highs pic.twitter.com/AJD4tixFB9— English Russia (@EnglishRussia1) 22 августа 2016 г.
Russia’s entry into new grain markets is bad news for the traditional exporters in North America, Europe and Australia with importers now able to buy for less.
The list of new buyers of Russian wheat includes Mali, Malta and Burma. According to information provided by Grain Quality Service state-owned company, Russia will export wheat also to Indonesia, until now the biggest buyer of Australian wheat, as well as traditional clients as Egypt, Bangladesh and Mozambique.
Meanwhile, the US Department of Agriculture has once again raised its forecast of the harvest and of wheat exports in Russia in the current season.
The forecast for the gross yield of Russian wheat increased to 72 million tons, which is 7 million tons more than the July forecast and 11 million tons above the level of last season.
The United States’ projected wheat export for the 2016/2017 season is 25.5 million tons.
In July, Russia exported around 2.5 million tons of wheat, and the August figure is projected at between 3 million and 3.2 million tons.
According to a BMI Research forecast, in the next five years Russia, Ukraine and Kazakhstan will emerge as the main suppliers of wheat to the Middle East and North Africa.