High crop yields will increase the country’s export capacity and alleviate global prices, the Sberbank deputy CEO has said
Russia expects a grain harvest of about 150 million tons this year, 15 million more than the 2017 record, the deputy CEO of Sberbank said on Thursday.
Such an output level would boost export capacity to 60 million tons, which is 5 million more than in the 2017-2018 season, Aleksandr Vedyakhin wrote in an article for Russia’s Izvestia newspaper.
Vedyakhin noted that in the early 2000s Russia was a net importer of grain, and it took the country less than 20 years to become world’s largest wheat exporter, with a 20% market share. More than 120 countries purchased Russian grain in 2021 alone.
This year, however, Russian grain exports are constrained by Western sanctions. “Exporters are experiencing difficulties with freight ships and cargo insurance, as well as financial settlements with grain buyers,” he said.
In addition, increased security risks of grain supplies from the Black Sea ports have forced buyers to shift to alternative exporters.
As a result, Russia sold just 12 million tons of grain from July to September, which was 20% less than the same period in the past three years.
However, as wheat shortages continue on world markets, analysts expect demand for Russian grain to recover in the upcoming winter months.
According to Sberbank’s deputy CEO, expectations of a record harvest coupled with a July deal that unblocked Ukrainian grain exports, sent export prices down by 25% and increased its availability on global markets.
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