Russia’s wheat exports declined 14% in 18/19, further decrease is expected in 2019/20

Andrey Sizov 16.08.2019

In the 2018/19 (July-June) season Russia exported 35.3 MMT of wheat which is 14% lower than a year ago. In contrast to the previous season, this one did not bring any significant surprises. Since the autumn of 2018 when the harvest volume was more or less clear, we have been predicting exports of around 35 MMT. In the 2017/18 season, total exports were substantially higher than the initial estimates.

During the season, the export dynamics developed close to the usual pattern – high pace in the first half and a significant deceleration in the second half.

Russia’s monthly wheat exports, MMT

As we have repeatedly predicted earlier at the beginning of the season, the state did not interfere in export regulation, at least noticeably. However, it should be reminded once again that traders have frequently mentioned attempts to introduce unofficial quotas for large exporters as well as problems with obtaining phytosanitary certificates.

Export figures may still be slightly adjusted ex post facto, mainly due to supplies to the Eurasian Economic Commission countries but we do not expect any fundamental changes.

The top three largest buyers of Russian wheat in the season remained unchanged compared to 2017/18. On the first place is Egypt with 7.4 mln t (-15% YoY), on the second – Turkey with 5.2 mln t (+11%), on the third – Bangladesh with 2 mln t (-12%). Among the large buyers, supplies to Vietnam, which purchased 1.2 mln t (-46%), Indonesia (1 mln t, -32%), Nigeria (1.4 mln t, -18%), Sudan (1.2 mln t, -41%) declined significantly. The Philippines markedly increased its imports from Russia (0.9 mln, by 2.5 times).

In 2019/20 we expect wheat exports to decline further. Our current estimate is 31.4 MMT (Russian AgMin: 35 MMT, USDA: 34 MMT). Exports will be affected by lower supply because of smaller carry-in stocks and high competition with EU and Ukraine which are harvesting bumper crops.