Grain is exported according to plan – Kommersant

Despite the failure to fulfill part of the conditions of the grain deal, the Russian Federation does not slow down the pace of exports of a record grain harvest, follows from a new report from the US Department of Agriculture (USDA). As Kommersant wrote earlier, this is one of the key circumstances in the discussion of the extension of the Black Sea Grain Initiative (see Kommersant of May 11).

According to data on shipments in ports and open statistics of countries importing Russian agricultural products, analysts record that the Russian Federation exports the most significant volumes of grain this year to Egypt, Turkey, Saudi Arabia, Iran, Kazakhstan and Nigeria. Moreover, exports to some of them increased significantly – for example, the volume of wheat imported to Kazakhstan for the period from July 2022 to February 2023 almost equaled the figure for the entire 2021/22 agricultural year. According to the US Department of Agriculture, Russia managed to improve its position on the world market over the past year largely due to relatively low domestic prices (due to overstocking of the domestic market) in the context of a general rise in food prices in the world after the start of the Russian military operation in Ukraine.

According to USDA forecasts, thanks to competitive prices and continued demand from importers, the Russian Federation can export record volumes of some types of grain this season. For example, wheat exports are estimated at 45 million tons, which is 36% more than in the previous agricultural year. Despite the fact that the USDA does not take into account Crimea and other annexed territories in its estimates, the expectations of the US Department of Agriculture are higher than Russian ones. Thus, Sovecon predicts that Russia will export 44.5 million tons of wheat (see Kommersant dated April 18).

The forecasts also assume an increase in exports of oilseeds, including sunflower. Even last season, Russia outpaced its closest competitor in this indicator, Ukraine, which, due to the military operation, reduced production and exports, and in 2022/23 the gap will only grow.

The USDA reminds that Russian exports are seriously restricting domestic state regulation – export quotas and duties, without them the forecast would have been even higher. It should be noted that it was the presence of these limiting mechanisms that explained the cautious assessments of the export opportunities of the Russian Federation, which during the current agricultural year were given by both market participants and the authorities (see Kommersant of February 17).

Christina Borovikova