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Russia’s wheat exports seen rising in new season

Russia, one of the world’s largest wheat exporters, will export more of the grain in the new July-June marketing season due to a large harvest and stockpile, the IKAR consultancy said on Wednesday, raising its estimate for the wheat crop.

The country’s exports are crucial for global wheat supply, especially in the upcoming season as Ukraine’s Black Sea ports remain blocked after Moscow sent tens of thousands of troops into Ukraine on Feb. 24.

However, Russia, which competes mainly with the European Union and Ukraine for wheat supplies to the Middle East and Africa, has been limiting its exports with taxes and an export quota since 2021 amid efforts to slow domestic food inflation.

Russia may export 39 million tonnes of wheat in the 2022/23 season, which starts on July 1, Dmitry Rylko, the head of IKAR, told a conference in Geneva. In the current season, IKAR expects the exports at 32.0-32.5 million tonnes.

The country’s 2022 wheat crop is expected to reach 85 million tonnes, Rylko said, in what he called a “conservative” estimate. He previously expected a harvest of 83.5 million tonnes, up from 76.0 million tonnes in 2021.

Sovecon, another agriculture consultancy in Moscow, on Wednesday raised its forecast for Russia’s wheat crop by 1.2 million tonnes to a new record-high of 88.6 million tonnes amid good weather conditions, adding that it could upgrade it further.

Sovecon estimated Russia’s 2022/23 wheat exports at 41 million tonnes earlier in May.

It estimates that supplies from Russia will account for more than 20% of the 2022/23 global wheat trade.

“Russia’s importance to the global wheat balance in the new season is likely to be unprecedented,” Andrey Sizov, the head of Sovecon, said on social media.

The current state export quota, which Russia tends to set for February-June each season, will expire on June 30. The export tax will remain.

Asked about the possibility of an export ban from Russia at the conference, Rylko said that it was very unlikely as the country would have a large crop and record-high carry-over stocks.

“Russia’s strategic goal now is to ensure uninterrupted exports of what may be a massive harvest,” Rylko said.

Source: Reuters

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