Russia’s bumper wheat exports slow as lower demand weighs

Russia’s wheat exports are slowing from their record pace as traders see lower demand from key importers. 

The country’s two bumper harvests have helped bring global prices down from all-time highs after President Vladimir Putin’s invasion of Ukraine, and shippers have been rushing to get those volumes to market. But demand is suffering as major buyers like Egypt and Tunisia struggle with access to hard currency, as well as Moscow’s efforts to control foreign sales at prices it deems too low.  

Wheat exports could fall to 4.6-4.7 million tons in November, Interfax reported, citing rail carrier Rusagrotrans, down from 5.1 million tons in October. That’s because of low prices for wheat from Russia, it reported Monday. “Prices are stagnating despite the fact that the global wheat balance remains tense,” analysts at the rail operator told Interfax. 

Efforts to put an unofficial floor under local prices have also complicated Russian exports in recent months by forcing some traders to renegotiate or even cancel deals. Consultant SovEcon has trimmed its Russia wheat-export estimate for this season, partly because of the government’s export controls.

Russia’s grain harvest this year is expected to be the second-highest ever. Last year, it reaped record volumes of wheat that left it with carryover stocks to export this season. Shipments usually slow down in the winter as some river navigation closes due to ice.

The US Department of Agriculture boosted its Russia 2023-24 wheat production estimate to 90 million tons from 85 million tons last week.

Even so, Russia’s agriculture ministry said last week that it’s looking to keep its seasonal grain export quota at an elevated level that’s unlikely to curb outflows. The Russian export quota includes shipments from regions of Ukraine occupied by Moscow’s forces, Interfax reported.