WESTERN PRODUCER — Russia is attempting to conceal its grain exports, but the U.S. Department of Agriculture has figured out a way to track them and it shows sales are booming.
Russia stopped publishing its customs data in March 2022, forcing the USDA’s Foreign Agricultural Service to use alternative data sources to monitor the country’s exports.
It is using port loading and vessel data to track where Russia’s grains and oilseeds are heading, according to a recently published report, Russia Grain and Oilseed Exports Expand.
The data shows there has been a large increase in Russian wheat shipments to the Middle East and Africa for the first 10 months of the 2022-23 campaign compared to the same period one year ago.
The USDA is also using import data from key trading partners to track trade volumes. The grain import data is coming from markets such as Egypt, Turkey, Saudi Arabia, Iran, Kazakhstan and Nigeria.
Using the new data sources, the USDA is forecasting Russian wheat exports of 44.5 million tonnes in 2022-23, up 36 percent from last year and 3.5 million tonnes higher than the previous record set in 2017-18.
Sergiy Kyslytsya, Ukraine’s permanent representative to the United Nations, recently told a meeting of the UN Security Council that Russia is blackmailing the world by disrupting the Black Sea Grain Initiative and pretending to suffer from its existence, while in fact its grain exports are soaring.
“It is disgusting that Russia still pretends to be on the losing side of the deal,” he said in an article published by Ukrinform.
In the meantime, Ukraine shipped less than three million tonnes of grain through the corridor in April, which is half of the country’s export capacity.
The corridor is being underused because Russia is delaying vessel inspections, said Kyslytsya.
If the USDA’s export forecast proves accurate, Russia will be the world’s largest wheat exporter by a long shot in 2022-23, topping the European Union’s 34.5 million tonnes and Australia’s 31 million tonnes.
Wheat exports by sea have averaged 3.5 million tonnes per month, with the top markets being Turkey, Egypt, Iran, Saudi Arabia, Sudan and Algeria.
However, SovEcon reports that exports are slowing down, with only 680,000 tonnes shipped in the most recent week, the lowest total since February.
“Looks like no one needs wheat anymore,” SovEcon analyst Andrey Sizov recently tweeted.
Russia has also shipped “significant quantities” by truck or rail to Eurasian Economic Union countries, primarily Kazakhstan.
Kazakhstan has imported about 1.3 million tonnes through the first eight months of 2022-23, which is about the same as all last year and more than double the amount of the two previous years.
Russia has emerged as the world’s most competitive wheat supplier over the past decade, undercutting the price of U.S. hard red winter wheat in key markets around the world.
That price advantage has allowed the country to capture a large market share in Turkey and Egypt, two of the world’s top-three wheat markets.
That share could be even larger if Russia would allow the free flow of grain out of the country.
Instead, it has a floating export tax that has ranged from US$30 per tonne to nearly $150 since it was first instituted in February 2021. The tax was around $60 per tonne as of early-May.
The tax has raised Russia’s export prices, but lowered returns on the farm. However, farmers still seem interested in planting the crop.
Russian growers seeded 8.65 million acres of spring wheat as of May 4, which is 2.7 times last year’s pace, due to warm weather and favourable precipitation, according to SovEcon.
Precipitation levels in central and southern Russia have been 100 to 150 percent of normal.
Total spring wheat area is forecast at 32 million acres, which is similar to last year.
SovEcon is forecasting a Russian wheat crop of 86.8 million tonnes in 2023-24.
The USDA’s forecast is smaller at 81.5 million tonnes, but it is still anticipating record exports of 45.5 million tonnes due to large carryover of the crop.