MOSCOW, RUSSIA — While Russia harvests what is expected to be a record wheat crop, exports in July and August, the first two months of the new season, fell 22% to 6.3 million tonnes from a year earlier, Bloomberg reported, citing shipping data from Logistic OS.
Since the start of the new season, Russian wheat shipments are no longer constrained by an export quota that was in place for the second half of the previous season to protect domestic supplies, but economic sanctions following Russia’s Feb. 24 invasion of Ukraine are being blamed by the government for hampering shipments.
Russia is the world’s largest wheat exporter, mainly to the Middle East and Africa, and agricultural consultancy Sovecon has estimated a record harvest of 94.7 million tonnes in 2022. While the European Union and the United States have stressed that food and fertilizer are not targeted by the sanctions, Russia contends bankers, insurers and shippers have been wary of doing business as a result.
Russian farmers also have been reluctant to sell wheat as a strong ruble and high export tax make it less attractive, while some European customers weighted their orders to earlier in the year, Bloomberg noted, citing Moscow-based institute IKAR.
Shipments are projected by IKAR to rise to 4 million tonnes in September, though that still would be behind the 4.7 million tonnes exported a year earlier.
Meanwhile, Ukraine restarted its shipments last month, exporting 1.5 million tonnes of food through the grain corridors established under the Black Sea Grain Initiative, a deal brokered by the United Nations and Turkey and agreed to by Ukraine and Russia on July 22.
While the cargoes from Ukraine’s Black Sea ports are little more than a quarter of pre-war volumes, the government hopes shipments will pick up in the coming months. Before the war, 5 million to 6 million tonnes of grain were typically shipped monthly via Ukraine’s Black Sea ports.