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Beyond COVID, Russia's State Grain Trader UGC Eyes Algeria And Iraq

Published on Sep 4 2020 10:29 AM in Supply Chain tagged: Trending Posts / Wheat / Russia / Algeria / Iraq / COVID-19 / United Grain Company / Jordan

Beyond COVID, Russia's State Grain Trader UGC Eyes Algeria And Iraq

Russian state-controlled grain trader United Grain Company, which has transformed itself into a big exporter within a year, is eyeing trade with Algeria and aiming to boost sales to Bangladesh while maintaining sales to Egypt's state buyer this season, it said.

Its strategy signals tougher competition for foreign and local veterans of Russian grain trade as UGC's co-owner, state-controlled bank VTB, has also become a large grain exporter.

'Export of grain is not so much a commercial story as a task of state importance,' UGC said in emailed answers to Reuters' questions.

Russia, one of the world's largest wheat exporters with Turkey, Egypt and Bangladesh its top buyers, competes with the United States, France and Canada. President Vladimir Putin wants to boost agriculture exports significantly.

Competitive Advantage

UGC has had the competitive advantage - access to export infrastructure - for years as it owns a grain terminal in Russia's part of the Black Sea. But its exports were modest until its Swiss trading firm Grain Export became active at tenders of Egypt's state-run GASC a year ago.

"We intend to continue to participate in GASC tenders and expect to maintain our leading position," UGC said. Its exports doubled to 2.7 million tonnes in the 2019/20 season, which ended on 30 June.

UGC also said that it would supply Russian wheat to Jordan's state grain buyer for the first time in five years. In June, Grain Export sold 60,000 tonnes of wheat to Jordan.

The origin for shipment in the second half of October is optional, but UGC said it would come from Russia.

Algeria and Iraq remain the last globally important wheat markets which are not buying Russian wheat due to quality concerns.

The novel coronavirus has slowed down negotiations about the opening of these two markets to Russian-origin grain, but UGC hopes that there will be progress once the pandemic ends, it said.

News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.

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