Wheat

Russia’s Wheat Exports In December To Be Record High: Experts

Russia’s Wheat Exports In December To Be Record High: Experts

With the diminishing impact of Covid-19, people had high hopes for the year 2022. However, that went for a toss in a manner that no one was ready for. While Covid-19 threw life out of gear in the past two years, the series of events in 2022, smashed the high expectations that people in general and exporters and importers of food and agro-commodities had in particular.

At the start of the year, started the Russian invasion of Ukraine and the war between the two biggest grain producers and exporters resulted in disruptions in the supply chain. As a result, countries around the world were struggling to address their food needs, with poor nations facing the heat.

To help nations cope with their food needs, some countries planned to export high volumes of food and agro-commodities. However, adverse weather conditions around the world restricted the implementation of such a plan.

The situation was such that a deal between the two seemed to be the only way out in the light of grain shortages in different parts of the world and when a deal between Russia and Ukraine, popularly known as the Black Sea Grain Initiative was signed; countries around the world took a sigh of relief.

However, even after the signing of the deal, the exports from Russia and Ukraine have been stormy. Every now and then, there have been reports of tensions with respect to exports of food and agro-commodities from Russia and Ukraine which have kept people on tenterhooks all the time.

In light of all this, analysts believe that wheat exports from the largest wheat supplier-Russia are going to be a record high in December. However, they have been quick to cite that this is subject to free and uninterrupted trade through the Black Sea route.

Russia’s Grain Exports Slowly Returning To Normal

Despite war and tensions with Ukraine and western nations, Russia is on course to harvest a record grain crop of 150 million tonnes in 2022, out of which wheat production is estimated to be 100 million tonnes. 

Talking about the country’s exports, Russia’s exports are expected to reach 26 million tonnes in the July-December period, which is 10% more than the export volume during the same period last year.

While the export volumes are certainly satisfactory, Russia holds a higher potential in this regard and agro-exporters of Russia hope that a drop in global prices will help boost demand and weak currency will help improve the sales margins to a greater extent. 

Sanctions By The West Hampering Russian Trade

Following the Russian invasion of Ukraine, the West and its allies have imposed sanctions on Russia which has hampered its financial sector and although the sanctions don’t affect the export of grains, it does make it difficult for grain exporters of Russia to process bank payments and obtain vessels, secure trade finance and avail insurance necessary for conducting trade.  

The Bottom Line

Russia is the largest Wheat Exporter in the world and despite being involved in a war with Ukraine, experts believe the country’s wheat exports to be high in December. However, they have based their forecasts on the assumption that there will be no significant disruptions in the Black Sea Region.

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