Miller Magazine Issue: 128 August 2020

16 NEWS MILLER / August 2020 EU overtakes Russia as top wheat exporter The European Union overtook Russia as the world's top wheat exporter in the 2019/20 season, according to a re- port issued by the U.S. Department of Agriculture (USDA) on 10th July. Russia exported 34.5 million tonnes in the 2019/20 season that ended on June 30, while the EU exported 38.0 million tonnes, the USDA said. Russia and the EU are yet to release final official data for the season. Some traders were discouraged from submitting offers for Russian wheat to big customers such as Egypt for April-June after Russia imposed a quota to limit its exports, citing the need to secure domestic supplies amid the coronavirus crisis. The EU's exports of 38 million tonnes, if confirmed by the official data, would be a record for the bloc after a good crop in 2019. Russia aims to use the grain export quota mechanism permanently, but the first half of the 2020/21 season - July-December - is expected to be quo- ta free. Its state grain export quota has been criticised by leading market analysts as a hurdle for the long-term self evolution of the free market. Russia is likely to be the world's leader in wheat exports again in the 2020/21 season due to this year's large crop, but it would help its market share if the long-term risks of the state intervention are eased, the IKAR agriculture consultancy said. "Being the world's top exporter is not as important as the good income of the rural population, but our leadership in this market might be at risk in the long term if we continue to regulate it at this pace," Dmitry Rylko, the head of IKAR, said. In Russia, the area under wheat has been officially incre- ased. SovEkon, which included this in the production esti- mate, left the last forecast at 79.7MMT so far. IKAR raised expectations by 1.5MMT. Rusagrotrans reduced wheat production to 77.5MMT despite record acreage since 1982. The wheat harvest in the Center will be a record, the Volga - almost a record, but in the Urals and Siberia - the lowest since 2012, and in the south - since 2014. Exports of Russian grain are expected to total 41.7 million tons in the current agricultural season, according to the Russian Federal State Statistics Service. Supplies of wheat to the global market may reach 33.2 million tons. The mi- nistry expects the country’s grain harvest to reach 122.5 million tons this year, including up to 75 million tons of wheat. Last year’s grain production stood at 120.6 million tons. In April, Russia capped grain shipments until July to avoid domestic price spikes amid global coronavirus crisis. Moscow introduced export limits for certain grains, inclu- ding wheat, rye, barley, and corn, saying that the supplies should not exceed seven million tons.