RUSSIA- Wheat exports from the world’s largest grain exporter, Russia, continued to thrive during the 2022/23 marketing year with ample supplies and competitive prices and are likely to hit a record 45.0 million tons, according to a report by the foreign agricultural service (FAS) of the United States Department of Agriculture (USDA).
Moreover, export volumes could be even higher had the Russian government not applied export taxes and quotas; self-imposed trade-restricting measures.
According to the report, over the past decade, Russian production of grains and oilseeds has increased significantly due to both expansion of the area for some crops and improved yields for others.
In the 2022/23 marketing year, production increased for all major grains and oilseeds, with the country especially posting record production of wheat, sunflower seed, and rapeseed.
Wheat production performed particularly well, nearly doubling the volumes posted a decade ago.
Notably, the USDA estimate of Russian wheat production only includes the wheat produced within the Russian Federation, not including Ukrainian territory Russia has illegally attempted to annex, such as Crimea.
Moreover, in addition to production gains, Russia began 2022/23 with ample wheat stocks because of the export restrictions imposed by the government during the previous marketing year to ensure sufficient domestic supplies and maintain lower domestic prices.
Therefore, Russian wheat exports are likely to hit a record 45.0 million tons in 2022/23, up 36 percent from the prior year, 3.5 million tons above its previous record in 2017/18, with EU wheat exports at 35.0 million tons.
The top markets for sea-bound vessels are Turkey, Egypt, Iran, Saudi Arabia, Sudan, and Algeria.
However, the vessel data fails to fully capture exports via land transportation routes, which account for significant quantities shipped to Eurasian Economic Union countries, principally Kazakhstan.
According to reported data from the Kazakhstan Customs Control Committee, imports of Russian wheat are nearly on par for July 2022 to February 2023 with all 2021/22 imports.
These volumes are up sharply from recent years as Kazakhstan became a major trading partner of Russia.
However, the Kazakhstan government imposed a 6-month ban on imports of wheat by road, aimed at halting imports of low-priced Russian wheat by truck.
Over the past decade, the Black Sea region has emerged as the most competitive wheat supplier. As a result, many countries in Africa and Asia rely on the region for both milling and feed-quality wheat.
Moreover, Russian wheat exports have been robust during 2022/23 due to competitive prices for most of the marketing year that began in July 2022. This price advantage enabled it to capture a large market share within Turkey and Egypt, two of the top three global importers.
Russian oilseed products export higher
According to the FAS report, Russian domestic processing for oilseeds, particularly crush for sunflower seeds, has expanded in Russia despite relatively stable domestic demand.
With the reduced availability of functional crushing facilities in Ukraine, Russia has expanded production of these value-added products for export markets, mostly destined for the Middle East and Asia.
Overall, Russian exports have been doing well, despite the various trade-restrictive measures established to ensure domestic food security.
What began as a policy implemented to dampen domestic food price inflation during the COVID-19 pandemic has become an annual occurrence.
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