There are silver linings to Russia’s depressed ruble: with France’s crop yields depressed from widespread flooding this year, Russia is set to dominate the wheat export market. Bloomberg:
Russia will export a record 25.5 million metric tons in the season started in July, the most in the world for a second straight year, the U.S. Department of Agriculture estimates. Global output will rise to a record for a fourth straight season, and stockpiles have never been bigger, USDA data show. Prices on the Chicago Board of Trade, the global benchmark, fell this month to the lowest since 2007.Wheat for loading at Black Sea ports was $165 a metric ton as of Friday, according to the Institute for Agricultural Market Studies in Moscow. That’s almost $15 cheaper than French wheat with a minimum of 11 percent protein content for loading at the port of Rouen, based on FranceAgriMer data.In two tenders this month, Egypt agreed to buy 480,000 tons of wheat with half coming from Russia, and Ukraine and Romania supplying the rest. Last season, Russia also led sales for the first time in three years.
During the Cold War, the Soviet Union, which then included the ‘breadbasket’ of Ukraine, could never feed itself, and frequently had to import wheat from the West. Today, even without Ukraine, Russia has become the world’s leading wheat exporter.