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IKAR predicts more than half of Russian wheat harvest for global trade

01 May 20243 min reading

The Moscow-based Institute for Agricultural Market Studies (IKAR) predicts that Russia will set a record with wheat exports exceeding 52 million tons this season. According to IKAR, Russia’s exports will exceed half of the harvest for the first time, and the country’s share in the world wheat trade will reach 25%.

Commenting on Russia’s grain production and trade, IKAR Director Dmitry Rylko stated, “This season is poised to mark a milestone for wheat exports. For the first time, exports will surpass 50% of the harvested crop, reaching approximately 56% of total production.”

According to IKAR forecasts, Russia is projected to harvest 92.8 million tons of wheat during the current harvest season (July 2023-June 2024), with around 52 million tons destined for export to global markets. In the previous season, Russia harvested 104 million tons of wheat and exported 48 million tons.

Rylko predicts that the trend of exports surpassing half of the harvest will persist in 2024-25. IKAR anticipates the wheat harvest in the upcoming season to reach 93 million tons, with wheat shipments totaling 52 million tons. The institute expects Russia’s total grain shipments to reach 70 million tons this season and 68 million tons in the new season. As the world’s largest wheat exporter, Russia aims for a total grain harvest of 147 million tons in 2024.

RUSSIAN FARMERS PLAN TO CUT WHEAT CULTIVATION

Russian farmers are contemplating reducing wheat acreage in favor of higher-margin crops like soybeans and peas. This shift comes in response to low global prices, escalating costs, and the ongoing imposition of export taxes, all of which have diminished profitability, as reported by Reuters. According to the Russian state statistics agency Rosstat, the profitability of grain production plummeted from approximately 70% in 2022 to 23.9% last year. Salis Karakotov, director of the Russia-based seed company Shchelkovo Agrochem, highlighted to Reuters that the profitability of spring wheat in the country is expected to be either zero or negative, while winter wheat may see an average profitability of around 15%.

IKAR reported a decline in the export price of wheat shipped from Russia’s Black Sea port of Novorossiysk, dropping from $242 FOB per ton in January to less than $200 per ton in early March. The export taxes aimed at curbing food inflation and safeguarding the local grain market, is a significant factor contributing to the erosion of farmers’ profitability. However, despite these challenges, Russia’s Agriculture Ministry has stated that there are no plans to abolish this tax.

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