Russian government triggers a shakeup of global wheat marketing
JUST as a weakened Australian dollar makes Australian agricultural commodities some of the world’s most attractive, the marketing landscape is being rewritten almost faster than anyone can keep up. The Americans are flexing their economic ‘aid’ muscles, reportedly giving the financially-embattled Egyptian government a $100 million dollar aid donation. Provided it is used to buy US wheat. Russia has already started throwing up trade barriers against all exporters with a new tax almost certain to take it out of the world marketing arena. And that, it seems, is only the start. In the past three years the Russians have imported 2.1 million tonnes of wheat, although total imports have declined in each one of those years. Now the Russian government seems determined to almost force wheat selfsufficiency on the country’s producers. One of the world’s largest wheat exporters, Russia has denied it was considering grain export curbs as an option to balance domestic demand during the 2014-2015 marketing season. Plum Grove’s Tyson Fry is suggesting that is just the start with the Russians, and in a recent market analysis said rumours of further trade restrictions have emerged from Russia, with an announcement from the country’s agriculture minister expected soon. Fry also said Stats Canada estimates that December 31 all-wheat stocks totalled 24.8 million metric tonnes. “This is down 13.5 per cent from the same period last year – but is still the second largest figure recorded in 18 years,” Fry said. “South Korea also jumped into the market in mid February taking a cargo of Aussie wheat,” he said. “It totalled 40,000 tonnes of ASW at $US246/mt FOB, while a further 10,000 tonnes of Hard wheat was valued at $US262/mt FOB.” At the same time Archer Daniels Midland Germany (formerly Toepfer International here) said the Russian tax came in at a rate of 15 per cent plus 7.5 euros, adding about 35 euros a tonne ($48/t) to the price of wheat. The export tax was expected to remain in place until at least the end of June. ADM Germany said Russia had exported 17 million tonnes of wheat by mid-January, but was only expected to ship another 1.5 to 3.5 million tonnes during the rest of the export season. While European wheat stocks are about 16 million tonnes, much is poor or feed quality, with Europe from England to Hungary and the Czech Republic, all battered by wet weather last growing season. But a large part of the wheat was feed quality, with France, Germany, England, Hungary and the Czech Republic all hit by wet weather last harvest.