Russia, currently the world’s largest exporter of wheat, is preparing to press the EU and the United States even more, renewing its attempts to open the most complex markets for deliveries, Investing.com reports.
Success in Iraq, Saudi Arabia and Algeria should finally consolidate Russia’s leading position in the Middle East and North Africa, analysts say.
Wheat traders said price is an increasingly decisive factor in securing export deals with a challenging economic backdrop, caused in part by sliding oil prices.
Cheaper oil is playing to Russia’s advantage in grain, keeping prices for Russian wheat relatively low in dollar terms due to lower fuel costs and a weaker local currency.
“With crude oil prices remaining low, the Arab countries are asking themselves why they are paying millions of dollars more than they need to for wheat imports,” a German trader told Reuters.
“In a direct price fight, I would expect Russian wheat to take the main share of markets opened to them,” the trader added.
Iraq, a major Middle East grain buyer traditionally reliant on the United States, wants to allow Russian wheat in its state buying tenders, its new trade minister Mohammed Hashim al-Aani said last week.
According to the SovEcon analytical center, Russia has noticeably increased the volumes of wheat supplies to European countries at the beginning of the 2018/19 season. At the same time, the export geography has expanded.
“For the first time in recent years, Russian wheat has arrived in Belgium, Denmark, and Sweden. In September, a record monthly volume of wheat was delivered to Lithuania, Norway, the Netherlands,” SovEcon said.
