Russia targets top wheat trader with plan to curb exports

Russia’s agriculture regulator has proposed cutting the export quota of a top grain trader, in an escalating spat that risks disrupting shipments from the world’s largest wheat exporter. 

The watchdog proposed redistributing previously approved grain export quotas, including for top exporter TD Rif, according to a statement on Monday. It cited “systematic inconsistencies” in grain safety and quality as a reason for the move.

The company says it has faced mounting pressure from authorities, with owner Petr Khodykin stating in a local media report last week that blocked shipments are leading to “huge losses.” Khodykin added that the firm is being pushed to sell its assets for a “negligible price.”

The dispute is the latest sign of how the Kremlin is moving to take stronger control of exports since Vladimir Putin’s invasion of Ukraine. Major Western traders exited Russia’s grain export market last year after local officials and influential industry voices called for their role to be limited. Moscow has also been trying to implement an unofficial minimum price for its grain. 

TD Rif and Russia’s agriculture ministry did not immediately respond to phone and email requests for comment on the quota redistribution. 

The government has used agricultural trade limits before as a tool to apply political pressure in disputes with other nations. It implemented a partial ban on banana imports from Ecuador after the South American nation agreed to trade old Russian military equipment to the US for $200 million worth of new weapons, a decision which the Foreign Ministry in Moscow called “reckless.”

While other Russian traders may pick up the slack if TD Rif’s export quota share is redistributed, any sign of a slowdown in wheat shipments from the nation stands to shift demand to other origins and could lift global prices. Russia’s bumper harvests have helped bring global wheat prices down after they hit records following the invasion.

Wheat futures in Chicago advanced on Monday.