Russia announced an export quota that would cap exports of wheat, corn, rye, and barley at 25.5 million tonnes from February 15 to June 30, 2023, despite harvesting its largest wheat crop ever this summer. Individual cereal export restrictions have not been set yet, but even at the announced limit, Russia’s wheat exports for the quota period are expected to be higher than last year. For the whole 2021/22 marketing year, Russia exported 33 million tonnes of wheat.
Throughout its growing season, Russia’s winter wheat benefited from mild temperatures and adequate precipitation throughout April as the crop emerged from dormancy. Above average rainfall continued in May and June also aided final yields, as shown by Gro’s Climate Risk Navigator and Gro’s machine-learning Russia Winter Wheat Yield Forecast Model. Winter wheat accounts for 70% of Russia’s wheat production.
In Russia, mid-February through the end of June export quotas on cereals have become fairly standard practice in recent years, but the new caps arrive as the country is battling soaring domestic food inflation.
The new measures might also push the USDA to dial back its wheat export estimate for Russia. Currently, the USDA is expecting Russia to ship a record 42 million tonnes of wheat for the full 2022/23 marketing year that started on July 1. Since then, the pace of export to Russia’s primary buyers in Africa and the Middle East have lagged because insurance premiums and financing costs for Russia wheat cargoes are elevated.
Russia’s strong wheat harvest contrasts with poor prospects in other global breadbaskets. While the US and Argentine wheat crops are suffering amid drought conditions, Australia’s crop, which is nearing harvest, is battling excessive rains that could reduce the quality of their grain. Planting paces in Ukraine have also been slower than expected. Overall, global wheat ending stocks, excluding China, are forecasted to be the tightest in 14 years.