Egypt – Egypt’s recent decision to place its largest-ever wheat order, totaling 3.8 million tonnes, has set the stage for Russia to further solidify its position in the global wheat market.

According to trade analysts, as one of the world’s largest wheat importers, Egypt’s shift in its purchasing strategy towards Russia and other non-European exporters means that Russia stands to gain significantly from this development.

Since 2015, when Russia overtook other nations to become the world’s leading wheat exporter, it has capitalized on geopolitical shifts and market dynamics to expand its global footprint. Russia’s response to EU sanctions over Crimea, by bolstering its agricultural exports, has further entrenched its dominance.

Egypt’s latest move underscores this trend, as negotiations with Russian suppliers signal a strategic pivot from traditional European partners to more competitive and reliable sources.

Competitive Pricing and Currency Leverage

Russia’s ability to offer wheat at highly competitive prices is bolstered by a weak rouble, which enhances its appeal to price-sensitive buyers.

The currency’s devaluation has allowed Russian exporters to undercut European competitors, making Russian wheat more attractive to importers facing economic pressures.

This competitive edge is crucial in the wake of reduced output from EU countries, particularly France, which has seen a sharp decline in its wheat exports due to a poor harvest. As a result, EU soft wheat exports are projected to fall from an average of 35 million tonnes to just 26 million tonnes this year, a 9 million tonne decrease.

In contrast, Russia is set to export 43 million tonnes of wheat in 2024, only slightly down from its record 56 million tonnes in 2023, but still supported by one of its best harvests in the past five years, totaling 82 million tonnes.

Moreover, Russia’s growing market share in wheat exports is more than just an economic win, it is also a strategic geopolitical move.

By capturing larger shares of the MENA and African markets, Russia is positioning itself as a reliable partner for countries seeking stable, affordable food supplies amid global uncertainty. This strategy aligns with Russia’s broader geopolitical aims, using its agricultural strength to gain influence and leverage in regions where food security is a critical issue.

In addition, the ability to provide consistent volumes at favorable prices has not only attracted traditional wheat importers like Egypt but has also cemented Russia’s role as a key player in the global food supply chain.

Russia’s expansion in the wheat market is most evident in the Middle East and North Africa (MENA) region, where it has overtaken France as the primary supplier to key markets like Algeria.

The diplomatic fallout between Paris and Algiers over Western Sahara has pushed Algeria and other MENA countries to seek alternative suppliers. Russia, with its capacity to deliver large volumes at competitive prices, has emerged as a favored partner, reinforcing its influence in the region.

With Egypt leading the shift, several other North African nations, including Morocco and Tunisia, are also gravitating towards Russian wheat.

In 2023 alone, the three Maghreb states purchased 19.5 million tonnes of wheat from foreign suppliers, a marked increase from 17.1 million tonnes the previous year.

Local production shortfalls and cereal export suspensions by key African nations such as Ghana, Nigeria, and Ivory Coast have further boosted demand for imported wheat, positioning Russia as a key beneficiary.

A Wake-Up Call for European Producers

The growing dominance of Russian wheat in traditional markets is a stark warning for the European Union. European agricultural experts suggest that the EU must adopt “more aggressive agricultural diplomacy” to counter Russia’s increasing influence.

Without strategic interventions, such as building stronger trade relations and addressing market barriers, analysts project that the EU risks further losses in both market share and global credibility.

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