It’s been a long time since any country shipped out as much wheat as Russia.
As estimates for the Black Sea nation’s harvest keep growing, so does the outlook for exports. The world’s top exporter is now expected to sell 36.6 million metric tonnes overseas, according to consultants SovEcon and the Institute for Agricultural Market Studies, or IKAR. The US was the last nation to ship out more, a quarter century ago.
Helped by fertile soil and more farm investment, Russian wheat output has boomed in recent years and allowed the country to grab market share from major exporters like the US and Canada.
Russia’s ever-growing harvests have also added to a global glut of the grain that pushed benchmark futures in Chicago down 50%since mid-2012.
Russia’s most recent harvest turned out bigger than expected as favorable spring and summer weather boosted yields. The record crop and relatively weak ruble has kept Russian grain competitive, while ports have coped with bigger supplies as mild winter conditions kept shipping lanes open later than usual.
New markets for the country’s grain “allows Russia to maintain a record pace of wheat exports,” SovEcon said on its website. One example is Venezuela, where Russia has been sending cargoes every month since starting shipments to the country in August, it said.
SovEcon and IKAR’s estimate for Russian shipments are bigger than the forecast from the US Department of Agriculture, which pegs this season’s amount at 36 million tonnes. That would still be the most since America exported 36.8 million tonnes in the 1992-93 season, US government data show.
However, the amount is still way below the 48.2 million tonnes that US exports peaked at in the early 1980s. American shipments remained high for much of that decade, partly as the former Soviet Union relied on overseas purchases.
News by Bloomberg, edited by ESM. Click subscribe to sign up to ESM: The European Supermarket Magazine.