Russia on track for record wheat harvest but exports down by a quarter in July-August

Russia on track for record wheat harvest but exports down by a quarter in July-August
Russia should bring in 130mn tonnes of grain this year, just below the record 135mn harvested in 2018, but the forecast bumper wheat harvest of 95mn tonnes will set a new all-time record. / bne IntelliNews
By bne IntelliNews August 24, 2022

Russia is on track to for a record wheat harvest of 94.7mn tonnes, smashing the previous record of 84mn tonnes set in 2018, but exports are down by a quarter (27%) in the first two months of the new agricultural marketing year, which runs from July 2022 to June 2023, the SovEcon agency says.

Russian agriculture consultancy IKAR also raised its forecast for Russia's 2022 wheat crop to 95mn tonnes last week from a previously expected 90.5mn tonnes, mainly due to higher yields in the Central and Volga regions.

This year’s wheat harvest will be well ahead of last year’s 75.9mn tonnes and has surged past earlier estimates for 77mn tonnes set earlier this year.

The harvest of 2018-2019 was an all-time record, beating even the best harvests in Soviet times, when a total of 135.4mn tonnes of grain was brought in, including 86mn tonnes of wheat. A total of 54.6mn tonnes of grain was exported in 2018, the highest in years.

This year the Ministry of Agriculture kept its forecast for a total grain harvest of 130mn tonnes and exports of 45mn tonnes of grain for the full year in July. However, with such a bumper wheat harvest that forecast may be revised upwards. (chart)

Russian farmers had already harvested over 40mn tonnes of grain by the start of August, including 33mn tonnes of wheat.

In July-August 2022, wheat exports from Russia amounted to 5.9mn tonnes, the lowest level of wheat exports since the 2017-2018 season. While much of the world’s focus has been on Ukrainian wheat bottled up by the Russian naval blockade of the Black Sea, Russian exports have also been stymied by the Western sanctions. However, both Ukraine and Russia saw relief following the Istanbul grain deal on July 22, where not only was Ukraine allowed to export grain again, but various sanctions on Russian grain exports were also lifted.

SovEcon says that Russian exports also remain at lower levels because the prices for wheat from Russia are higher than from other suppliers, primarily from the European Union.

“Russian wheat exports may accelerate in the short term due to falling domestic prices and/or rising world wheat prices. We believe that the Russian domestic market is far from the bottom, while there is a high probability that the world market has already overcome it,” SovEcon said in a statement quoted by TASS.