Russia’s Historic 100 Million-Ton Wheat Crop Piles Up at Home

(Bloomberg) - Russia's wheat harvest could reach a historic 100 million tons, according to consultant SovEcon, with the commodity piling up at home as the nation struggles to export large volumes.
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Farmers across the country finish bountiful harvests after good growing conditions throughout the summer. The huge supply from the world's leading shipper would normally help drive down world prices. But so far this season, government export taxes and logistical problems from the war in Ukraine mean more grain than usual is being kept at home.
"Storage has been a problem for some farmers for several months," SovEcon CEO Andrey Sizov said over the phone. "We haven't seen anything like this since 2017-18."
Russian wheat export prices have recently become more competitive than other source countries such as France and the US, meaning shipments could pick up. Higher prices and problems shipping Russian cargo — some insurers and banks avoided Russian commodities after February's invasion of Ukraine — slowed exports early in the season. Food exports are not subject to sanctions, but some institutions are wary of doing business with Russia because of these measures.
Wheat prices rose around the world after a Russian blockade of Ukraine's ports strangled that country's exports and pushed up food prices. While an agreement reached in July to reopen ports helped lower prices, the escalation of the war in Ukraine has returned wheat to pre-agreement levels.
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The International Grains Council also increased its wheat harvest estimate for Russia by almost 6 million tonnes on Thursday, but does not expect that extra shipment to leave the country - leaving the export outlook unchanged at 36.5 million tonnes.
"This huge harvest is not fully converted into huge exports," Sizov said.
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