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Russian grain is bought by more than 100 countries from Egypt to the Philippines, and Russia itself is looking to expand this list to include markets where its wheat has so far been undesirable due to strict grain quality rules.
This ambition was highlighted last week when a major buyer, Algeria, gave Russia the green light to increase shipments. A similar deal was struck last year with Saudi Arabia, another country Russia was trying to penetrate with its wheat.
“There has been a staggering increase in both production and exports from Russia,” said James Bolesworth, director of CRM AgriCommodities, a UK consulting firm. “Russia has invested a lot to increase its market share and it is still growing.”
The advance of Algeria
Algeria’s state grain agency announced last week that it will begin admitting wheat imports from all countries, including Russia, from the next tender. So far, Russia has been able to export only small shipments to this third-largest buyer, which tolerates only a small number of damaged beetles in its cargo.
Although Russia’s Agricultural Agency says it has not yet been informed of any changes, Russian grain carriers have already received invitations to Algerian tenders, and a French trader said the country intends to relax rules on damaged grain. The test shipment passed quality tests earlier this year, although it may take some time for sales to reach significant levels.
Other markets
Russia, which began selling to Saudi Arabia this year after the kingdom relaxed rules on damaged shipments, has also increased wheat exports to countries such as Turkey, Brazil, Vietnam and Tanzania in recent years. Russia, which has harvested its second-largest crop of all time, is expected to export $ 37.5 million this season. tons and will regain its name as the world’s largest exporter.
Russian farmers harvest wheat
More competition
Cheap Russian wheat has captured US export market share to the European Union over the past decade, dominating sales to countries like Egypt, where it has already gained about 80 percent this season. competitions. Even more Russian wheat traveling to Algeria would be a major blow to French shippers, as Algeria is its biggest customer and French exports outside the EU should be cut in half this season anyway.
However, in the coming months, Russia may face increased competition from Canada and Australia, where yields continue to rise.
Modern farmers
Russian farmers have come a long way from the collective farms of the Soviet era, which gave way to private ownership of fertile land. By increasing incomes, Russian farmers have invested in high-end fertilizers and equipment to further increase production, and have expanded storage capacity to have more control over grain and offer better prices.
“Their wheat is so good that it opens up new markets year after year,” said Georgiy Slavov, global research manager at London-based brokerage Marex Spectron. According to him, the low costs of the Russian supply chain have helped take over more business from suppliers like the United States.
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