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Russia dominates the international wheat market

19.08.2016

It is reported by the US Department of Agriculture that this year Russia has exported 22.5 million tons of grain, and it means that Russia has occupied the 1st place among wheat producers for the second year.

Also Russia has won the contract and will export 120,000 tons of wheat to Egypt. After harvesting the new crop in the autumn, Russia will start exporting wheat to China, as the Agriculture Ministry has reported.

The fact that now Russia dominates the international wheat market can be explained by low prices. This helped to increase the country’s market share. Now that the domestic currency is weakened, there are more investments, and the weather conditions are favorable, Russian agriculture has progressed and has even outran the U.S.A. Usually the Black Sea region (including Ukraine and Romania) establishes itself as a leader at the very beginning of the season, and France overtakes later.

But this year France has not managed to catch up and become one of the top wheat exporters due to the fields being flooded and the demands over the quality of grain being increased. This season the crops have been reduced by 17 percent by the soggy fields. It was stated that the quality of the Black Sea region grain was much higher than it was expected, and it would export a lot of grain. When the harvest was delayed in France, the traders did not even want to import French wheat.

It has been reported that wheat for loading at Black Sea ports cost $165 per ton, while French wheat cost $180 per ton. Last year Russia gained 14.4 percent of the international wheat market, and this year it is expected to gain 1.6 percent more, which means 16 percent. As to France, it is expected to gain 11 percent only. Last season it gained 12.1 percent.

Sergey Feofilov (the head of the agency) stated that Russia got high profit by having sold last year grains crop, and the farmers invested it technology. Due to it the position of Russia at the international wheat market is getting better. The expectations of the experts concerning Russian wheat production are positive.

It was said by one of the analysts at BMI Research, Alexandre Andrey, that Russia would be one of the top grain exporters and it would compete on price and quantity against Romania, Ukraine and France.


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