Russia’s wheat protectionist moves likely to boost Canada, U.S. sales

russia’s tougher wheat-export restrictions could spell good news for its North American rivals.

There are already signs importers are starting to balk at higher russian prices before an export tax is introduced in mid-february, and then raised for four months starting in March. With low stockpiles in the European union and near-term cargoes in Australia booked, that’ll likely increase demand for u.s. and Canadian grain, according to consultant Agresource.

“I’m sure everyone will turn to the Eu first, but the Eu just doesn’t have the wheat available to export,” Agresource president dan Basse said by phone. “There’s only one place that people can really turn to for wheat — North America.”

russia, the top wheat shipper, is imposing stricter-than-expected export measures after President Vladimir Putin demanded action to cool domestic food inflation. That helped global wheat prices extend a rally to a six-year high, and Moscow plans permanent duties when the new season starts in July.

Although russia is expected to remain the top supplier, some buyers have scrapped or postponed purchases. Egypt earlier this month took the rare step of cancelling a tender after drawing few offers at high prices. Turkey last week booked a quarter of the amount it was seeking, while Bangladesh suspended a tender.

Still, with taxes set to continue next season, russian traders and producers will probably adjust to the new regime to keep exports flowing, researcher ukragroconsult said in a note. Farmer sales may accelerate before the taxes kick in, said Andrey Sizov Jr. of consultant Sovecon.

Tight supplies outside North America mean u.s. sales could pick up from March, said Matt Ammermann at brokerage Stonex. The Saskatchewan Wheat development Commission said North American wheat looks increasingly competitive, and the u.s. recently reported a sizable sale of 138,000 tons to Nigeria.