Dmitry Rylko, Director General of the Institute for Agricultural Market Studies (IKAR), shared his insights on Russia’s wheat production and export prospects for the 2023-24 season in an exclusive interview with Miller Magazine. He discussed the impact of major players such as Cargill, Viterra and Louis Dreyfus ending their operations in Russia, as well as the opportunities and challenges posed by Russia’s record wheat stocks.
Dmitry RYLKO
Director General
The Institute for Agricultural Market Studies (IKAR)
Dmitry Rylko presented his latest forecasts for Russian wheat production and exports for 2023-24. As of 5 June, he estimated the Russian wheat crop at around 86 million tonnes (mt), with the total grain harvest expected to reach around 132 mt. However, Rylko emphasised the potential for rapid changes in the agricultural landscape, suggesting that these figures should be seen as preliminary estimates.
The decision by major grain traders Cargill, Viterra and Louis Dreyfus to cease operations in Russia raised questions about the potential impact on Russian grain exports. Rylko explained that while these companies had a significant market share in Black Sea terminal shipments, their impact on other channels such as Port Kavkaz and the Sea of Azov was relatively smaller. “These three companies are quite important on the Black Sea terminals shipment market. They have about 20% market share there. They are much less important on Port Kavkaz transshipments and on the direct Azov Sea coaster market,” he noted.
Rylko stressed that no single country relies heavily on these companies for its Russian grain imports. “If you look at importer countries, there is basically no country, where these three companies dominate the exports from Russia, although they play quite significant role on Saudi Arabia, Algeria, and some other important markets. So it seems that the Russian export market can do without them, although it would be a loss in terms of domestic farmers markets liquidity and competitiveness," he said. Their valuable contribution to domestic procurement was also acknowledged by Rylko. "They also had one of the best trading teams in Russia, so it would be very beneficial if these trading teams could somehow continue to play this role."
RECORD WHEAT STOCKS:
CHALLENGE OR OPPORTUNITY?
Russia is in the unique position of having record wheat stocks from the previous season. Rylko discussed the implications of these enormous reserves, describing them as both a problem and an opportunity. On the one hand, these stocks pose a challenge in terms of storage and logistics. However, Rylko emphasized their significant value, particularly in the 2023-24 season, as they would enable Russia to maintain high levels of grain exports. The surplus could serve as a buffer in the face of market fluctuations and global demand. “In general, these stocks will be very useful in 2023/24, as there will help to keep Russian grain/wheat export at very high level,” he said.