Russia to limit grains exports to license holders: report

Russia's Deputy Prime Minister Victoria Abramchenko said March 14 that the country will allow grains exports for companies holding licenses and quotas, addressing an earlier report that the agriculture and trade ministries were proposing a ban on exports from March 15 to June 30.

"Of course it is a temporary measure in order to keep volumes within the county. It allows us to control prices and cover the requirements of domestic consumers and processors," Deputy Prime Minister Victoria Abramchenko wrote publicly on messaging platform Telegram, a few hours after a report by the Interfax news agency that cited the agriculture ministry.

While an export ban would have been a significant intervention by the world's biggest wheat exporter, the minister's subsequent statement may not even mark a change of policy from what was previously in place. Grains exports from Russia have been subject to restrictions since February 2021, when export tariffs were introduced, and wheat exports between Feb. 15 and June 30 were already subject to an 8 million mt cap allocated to named companies.

As of March 10, Russia had exported 23 million mt of wheat since the start of the 2021-22 marketing year and the US Department of Agriculture recently said it expected Russia to export 32 million mt over the full year.

The main buyers of Russian wheat are countries in the Middle East and North Africa, such as Egypt, Turkey, Iran and Syria, where sharp increases in bread prices have previously triggered large protests.

In MY 2020-21 (July-June), Russia exported 39.1 million mt of wheat, or 20% of the global total, according to USDA estimates.

Global wheat prices have surged by more than a third since Feb. 24, when Russia invaded Ukraine, which itself provides around a tenth of global wheat exports.

Many traders have said they were not doing new business from Russia given high freight rates and difficulties in arranging payments.

The largest alternative source of wheat in the Black Sea is Romania, whose wheat exports this year are seen by traders at around 8 million-9 million mt.

The country has seen a wave of buying interest from traders who had been counting on Ukrainian cargoes they can no longer get out of the country.

The high prices have also raised fears that the region's exporters, which include Bulgaria, Moldova and Serbia, might impose export restrictions to protect domestic supplies and limit prices. Hungary made such a move with immediate effect on March 4.

Ukraine's removal from the market has also lifted wheat prices in France, the EU's largest wheat exporter. Farm office FranceAgriMer said March 9 it expected the country to export 9.7 million mt outside the EU this marketing year.