Russia aims for wheat export record, targeting 51 million tons in global sales

20 February 20243 min reading

Russia, the world wheat export leader for the past three seasons, is poised to establish a new record, targeting a 51 million tons in sales for the current season. In a strategic move to diversify its market reach, Russia has initiated a surge in export volumes to distant destinations, including Brazil and Mexico, expanding beyond its traditional markets.

Russia, which was a net wheat importer in the 1999/2000 season, has gained an important place in the global wheat trade in the last 20 years. Russia, which took the world wheat export leadership from the United States, will hold this position for the fourth consecutive season. Russia, which is expected to produce 91 million tons of wheat in the 2023/24 season according to the latest USDA estimates, is becoming increasingly export-oriented as record-breaking production outpaces domestic demand growth.

Expanding global wheat imports have enabled Russia to become the top global exporter, gaining market share at the expense of most other large exporters, including the European Union, Canada, the United States, Australia, and Argentina. In 2023/24, According to the USDA’s January World Grain Markets and Trade Report, Russia is on track to set a new world export record of 51 million tons, up 3.5 million tons from last year.  “One way it is achieving this growth is by expanding exports into Western Hemisphere markets,” the report says. “Despite the greater distance from Russian ports to the Western Hemisphere markets compared to other competitors, lower Russian export prices have overcome the freight advantage of these exporters”

One of the best examples of such a situation is Brazil. The South American country stands out as one of the new markets for Russia. Historically, Brazil imports primarily from Argentina due to proximity and preferential market access as Mercosur members. However, USDA report revealed that Brazil imported more from Russia than Argentina in the first 5 months of the 2023/24 season. One important reason for this is that Russian supplies are relatively affordable in contrast to Argentina’s diminishing supplies due to drought. “The bulk of Argentina wheat exports occur from January through April, and Argentina wheat has been more price competitive with Russia since the end of November. Russia will face increased competition in maintaining its export pace to Brazil in the second half of the trade year,” the report points out.

Mexico is another Western Hemisphere market where Russia has expanded market share. Unlike in Brazil, Russia has previously exported large volumes of wheat to Mexico, but exports dwindled from 2019/20 to 2021/22. Russia returned to the Mexican market in 2022/23, exporting 600,000 tons and is on pace to set a new trade year record in 2023/24 with more than 400,000 tons in the first 5 months, USDA states. “The United States is consistently Mexico’s largest source of wheat imports and, while this remains the case in 2023/24, imports from Russia have eroded some U.S. market share.”

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