Russia on course to smash records as it expands 2023/24 wheat exports

Russian wheat exports have become more diversified through the first half of 2023/24 compared to the same period of the previous year, indicating that the country has retaken its status as the cheapest origin globally, while concerns over potential sanctions have dwindled, Agricensus analysis of export data shows.

The shift in export destinations was driven by the price competitiveness of easily accessible Russian supplies amid bumper harvests, plus increased demand in several countries due to supply disruptions from rival suppliers.

Russia has ended the first six months of the current season with a new record for wheat exports at the half way point of the marketing year, building on last year's biggest ever export figures and supplying more than 26 million mt to countries outside the Eurasian Economic Union (EAEU) bloc.

That's 17%, or 3.8 million mt, more than a year ago at the same stage.

The number of countries to which Russia has supplied wheat has now reached 67 this season during the reporting period, compared to 57 a year earlier.

Available statistics show that the top four consistently large export markets for Russian wheat including Turkey, Egypt, Iran, and Saudi Arabia - although all have reported decreased supplies versus the previous year as competition for Russian flows has increased from other destinations.

Turkey retained its position as the main importer of Russian wheat in the first half of the 2023/24 season, purchasing 3.9 million mt, down 2.4% year-on-year.

Egypt ranked second in the list of wheat importers, but imports of Russian wheat have fallen by 22%, or 0.8 million mt, year-on-year to 2.9 million mt.

On the contrary, the volumes shipped to Southeast Asian destinations have markedly increased in the first half of the marketing year, mainly due to Bangladesh, Indonesia, as well as Pakistan.

Indonesia stepped into the top ten purchasing almost 1 million mt of wheat since the beginning of the season in July, compared to zero imports for the same period of the previous year.

That is reflected in a sharp reduction in the pull for Australian and Argentinian wheat.

Despite complaints from some trade sources that they continue to face difficulties importing Russian origin, the data shows that more buyers still see it as the best option.

A similar drift has affected Bangladesh's imports from Russia, with volumes up year-on-year.

Moreover, supplies to some countries in North and South America and the Pacific region increased significantly or were resumed – Mexico and Brazil increased imports to 500,000 mt each.

After a three-year break, shipments have also begun to Malaysia and, for the first time in four seasons, to Venezuela.

Brazil imported a record volume of wheat from Russia during the first 6 months of 2023/24, mainly replenishing the supply gap left by Argentina during a production crisis.

However, Russia may face increased competition in maintaining its export pace to Brazil in the second half of the marketing year amid partial recovery production in Argentina.

As for Mexico, Russia has previously exported large volumes of wheat to the country, but exports dwindled from 2019/20 to 2021/22.

Russia returned 'in full force' to the Mexican market in 2022/23, exporting 600,000 mt, and is now on pace to set a new marketing year record in 2023/24 with more than 500,000 mt in the first 6 months.

Despite the greater distance from Russian ports to Western Hemisphere markets compared to other competitors, lower Russian export prices have also overcome the freight advantage of these exporters.

Cheaper Russian wheat origin as well as the country's aggressive export drive have meant exports to North African and Sub-Saharan African countries grew over the same period.

Algeria, Tunisia, and Morocco, significant players in Nothern Africa’s wheat trade, continued to shift away from French and other European origins in favor of Russian wheat, as it has been often more affordable.

This has lead to a decline in French wheat exports to 5.6 million mt in 2023/24 from over 9 million mt in the previous year.

Meanwhile, Ukraine, the main rival from the Black Sea region, is still down about 30% year-on-year due to challenges exporting to Africa and Asia from its deep seaports, giving a head start to Russian replacement.

Overall, in 2023/24, Russia is set to hit a new global export record at 51 million mt of wheat, up 3.5 million mt from the prior year.

That comes as the country started the season with record carry-over stocks, along with another bumper crop and the volumes of wheat taken from the occupied Ukrainian territories, which allows to maintain the record export pace.

Wheat