Russian wheat: unless the government limits its exports, the domestic market will do this

The first half of the 2018/19 season in the Black Sea region is drawing to a close. Russian wheat was the main crop in the grain market at the time. Despite a decrease in its crop, wheat exports from Russian are still record high, continuing to warm up the entire world market.

UkrAgroConsult estimates that Russian wheat exports may reach all-time record for wheat shipments from the country in the first half of the marketing year.

Traditionally, Egypt and Turkey continue to be the top importers of Russian wheat. However, a substantial rise is seen in supplies to many key markets, including Vietnam, Nigeria, and EU countries.

This season’s situation in the world market allowed Russia to retain its leading position in wheat exports. The country was able to further step them up due to shrinking exportable stocks of wheat in nearby competitors (Ukraine, Kazakhstan, and France) combined with strengthening foreign demand. Another contributive factor was a more competitive export price of the Russian commodity.

Taking into account this record pace of Russian wheat exports in the first half of the season, they should be expected to slow down substantially in January-June 2019.