(Bloomberg) –Russia boosted wheat shipments by about 60% in March, despite that being the first month of its invasion of Ukraine.
The country exported about 1.7 million tons last month, according to consultant ProZerno. That compares with 1.1 million tons sold in March 2021, though those sales were stifled by shifts in government grain-export taxes. The most-recent volume still is only about half of March 2020.
Russia and Ukraine together account for about a quarter of global grains trade. Exports from Russia slowed immediately after its February invasion but since have bounced back, according to analysts and data providers. Sales remain tepid out of Ukraine, and that’s keeping global prices for crops such as wheat and sunflower oil at lofty levels and sparking growing worries about food access in major import regions like Middle East and North Africa.
Shipments from Russia ran at a “rapid” clip in the second half of last month as challenges surrounding payments and securing vessels willing to transit the Black Sea were “mostly” resolved, consultant SovEcon said in an emailed note. Some of that wheat is going to countries that usually imported from Ukraine.
Russia’s invasion cut off Ukraine’s ports, its main export route. While Ukraine is trying to export by rail, that likely will work just for small volumes.
At the beginning of March, Russian President Vladimir Putin ordered limits on financing for foreign companies from “unfriendly” countries, which caused problems for some exporters. Subsequent amendments to the order have allowed financing to run more smoothly.
Volumes across key agriculture commodities — which also include corn, barley and sunflower oil — totaled about 2.5 million tons during the month, a 15% increase from last year, according to Geneva-based crop data company Agflow.
The leading destinations were Turkey, Egypt, Iran and Libya. Those are mainly traditional customers, while some volumes also appeared for Israel, which often buys from Ukraine, said Nabil Mseddi, the company’s chief executive officer.
Trading house RIF topped Russia’s export rankings in March, with foreign trader Viterra shipping the second-biggest volumes, according to ProZerno. Still, Russia’s Grain Export Union said last week that new contracts were “negligible” when compared with previous seasons.
SovEcon expects Russia could fill its wheat-export quota of 8 million tons set for the latter part of the season unless additional trade restrictions are announced.
© 2022 Bloomberg L.P.
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