Russian wheat exports near record highs in December

MOSCOW Reuters wheat exports from Russia, the world's largest supplier, will be close to record highs in December if disruptions in its main sea route the Black Sea are limited, according to analysts and an association of exporters.

Russia is likely to export less than its huge crop would possibly allow over the entire 2022-June marketing season because of complications related to Western sanctions imposed on Moscow, some added.

Russian officials have said that sanctions imposed on the Russian financial sector due to what Moscow calls a military operation in Ukraine have made it harder for grain exporters to process payments in banks and get vessels, trade finance, and insurance.

In the first half of the season, according to Russia-focused Sovecon consultancy, wheat exports will be 2% higher than the same year-ago level, boosted in part by this year's record crop.

After much publicity about the hidden sanctions and intervention of the international community, Russian grain exports are slowly returning to normal, the Russian Union of Grain Exporters trade group said on Wednesday.

Russia's total grain exports, including supplies to Kazakhstan, Armenia and Belarus, are expected to reach 26 million tons in July-December, up 10% from a year ago, the association said.

This is certainly not bad, but the potential of the current season is much higher. The current drop in global prices will boost demand and the weakening of the rouble will improve sales margins. Russia is on track to harvest a record grain crop of 150 million tonnes, including 100 million tons of wheat, in 2022.

The challenge for the second half of the season -- January-June - will be difficulties associated with processing payments if Western sanctions are expanded, according to the group.

Egypt and Turkey are traditionally the biggest buyers of Russian wheat, but there is no official data available this year as Moscow suspended publication of its export and import data to avoid speculation after it sent troops to Ukraine on February 24.

Russia sold more wheat than any previous season to Saudi Arabia, Algeria, Pakistan, Brazil and Mexico since the start of the season, according to analysts at Russian rail operator Rusagrotrans.

Russia resumed wheat supplies to Iraq after a 10 year pause, according to Rusagrotrans.

Sovecon and another consultancy, IKAR, see December wheat exports at 4.0 -- 4.2 million tons.

That is close to the record of 4.3 million tons of wheat set in December, according to Sovecon, Russia exported 4.3 million tons of wheat in November.

Some traders stopped buying from farmers in Russia's south last week because storms complicated the loading of vessels in ports, it added.

We could repeat the November figures, but bad weather in ports will most likely prevent it, IKAR said.

If it is so, half-a-year wheat export will be at 23.5 million tons. It will still be technically possible, but it will be quite hard to reach our seasonal target of 44 million tons. Sovecon expects Russia's wheat exports to be 22.9 million tons, up 2% year-on-year, and equal to the average of the past five years. Russia's total 2022 23 grain exports are 56.1 million tons, including 43.7 million tons of wheat.

State-controlled trader United Grain Company expects Russia's 2022 23 grain exports to be 53 -- 54 million tons, its deputy head Ksenia Bolomatova said last week.

She said that without sanctions-related curbs, they would be over 60 million tons.