As estimates for the record Russian wheat harvest keep growing, so does the outlook for exports – the world’s top exporter is now expected to sell 36.6 million metric tons overseas, according to consultants SovEcon and the Institute for Agricultural Market Studies, or IKAR. The U.S. was the last nation to ship out more, a quarter century ago, Bloomberg reports.
Russian wheat output has boomed in recent years, helped by fertile soil and more farm investment. This allowed the country to grab market share from major exporters like the U.S. 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 percent since mid-2012.
Russia’s last year 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 U.S. Department of Agriculture, which pegs this season’s amount at 36 million tons. That would still be the most since America exported 36.8 million tons in the 1992-93 season, U.S. government data show.
According to SovEcon estimates, the country’s overall grain exports are close to a record-breaking 50 million tons, director of SovEcon analytical center Andrei Sizov said on Friday.
“Russia can for the first time become the world’s second in grain exports,” Sizov said.
Russia ceded the status of the global export leader in wheat exports to the United States last year but the Agriculture Ministry expects that Russia will regain this status as at the end of this agricultural year [July 2017 – June 2018].
The country exported 48 million tons from the agricultural year start [1 July 2017] until the end of January 2018 versus 37.7 million tons throughout the prior agricultural year.