Russian wheat increases export turnover
Russian wheat has every chance to become the country’s main export product this year. The figures show this: during the week, the cost of grain from Russia rose to 13.3 thousand rubles per ton, which is more than oil, which is currently experiencing bad times.
Against the background of the fact that the price of Brent oil fell to a record low of $25.5 per barrel, wheat continues to rise in price. Exchanges in Paris and Chicago show the growth of the price by about 6.5-7%. The same situation is observed on Russian trading floors. Interest is linked to the fact that a large number of countries are planning to buy grain to hedge against border closures and restrictions due to the pandemic. The hype is fuelled by the ban on flour, rice, wheat and cereal products, which has been introduced in a number of countries.
According to the information from the analytical center, which deals with issues of agribusiness, last year Russia exported about 23% of the total world wheat market. Experts believe that this year grain sales will increase. Due to the fall of the ruble, it has become more profitable for importers to buy Russian products, even taking into account that agrarians have raised prices. The producers also benefited from the difficult situation in Ukraine, the main competitor. The latter is planning to reduce supplies to the world market this year, as adverse weather conditions do not allow exporting large volumes. According to the forecasts of Ukrainian specialists, the number of crops will decrease by about 10%, which is about 7.7 million tons. The volumes of winter wheat will decrease by 12.5% as compared to the previous period. This situation gives Russia an opportunity to increase export of grain crops. So far, Rusagrotrans plans to sell 3.6 million tons of wheat to other countries.
Despite the good news in the agricultural sector, increased grain exports will not be able to compensate for losses incurred by the country as a result of a sharp drop in oil prices.According to the FCS data, last year the Russian Federation supplied the world market with 31.8 million tons of wheat and meslin, thanks to which the budget received 6.4 billion dollars. For comparison, oil has been sold for 121.4 billion dollars.
However, this does not mean that we should not pay attention to the development of food export; it still remains one of the main things for the country. While the defense industry earned $13 billion from foreign supplies in 2019, agro-industrial enterprises brought in $25 billion.