AS PROGRESS of the winter and spring crop harvest in Russia approaches three quarters complete, the government is holding firm on its total 2024 harvest and export forecasts, despite official reductions to the final planted area, lower-than-expected yields in many regions due to a hot, dry spring, and excessive rain causing harvest access and quality issues in other parts of the country’s vast and geographically diverse cropping zone. 

Demetra is one of Russia’s leading bulk handlers and has a network of grain elevators and terminals. Photo: Demetra Holding

According to the Russian Agriculture Minister Oksana Lut, the total grain harvest forecast remains steady at 132 million tonnes (Mt) for the 2024-25 marketing year to June, with a total grain export target of 60Mt. Visiting the Caucasus Region of Kabardino-Balkaria with President Vladimir Putin, the minister said the wheat harvest alone is expected to be 86Mt. 

The minister’s resolve came with an element of caution, suggesting that the final numbers could be lowered as the harvest campaign drew to a close. Being careful not to be drawn into an official wheat export forecast, the minister added that export quotas and the overall export target would be decided at the conclusion of the 2024 harvest to ensure sufficient grain is retained to cover domestic requirements over the next 12 months. 

Challenging season

Russia has been hit by multiple weather extremes this season, ranging from drought and floods to severe early spring frosts. Some grain-producing regions have suffered significant production losses, while as much as 1.1 million hectares (Mha) has reportedly been totally lost to production this year. And the lousy weather has shown no signs of abating during the summer harvest period, with flooding in the Urals and parts of Siberia adding further woe to a chaotic growing season by hampering fieldwork and leading to quality downgrading in early harvest samples. 

At the conclusion of the week ending August 16, the harvested wheat volume was reported at 60.8Mt off 17.4Mha, just under 60pc of the total wheat area. This compared to the 66.1Mt harvested at the same point in the 2023 harvest campaign. The average wheat yield was reported at 3.49t/ha, around 12 percent lower than at the same time last year. 

Black Sea market analyst SovEcon last week lowered its overall Russian grain harvest forecast from 130.5Mt to 128.4Mt. However, it moved against that trend by adding 400,000t to the wheat production forecast, increasing it from 82.9Mt to 83.3Mt, reflecting yields reportedly approaching record levels in parts of Siberia and the Urals. 

The previous week it had reduced its wheat crop forecast by 1.8Mt, claiming the adjustment related to recently published planted area data from Rosstat, the Federal State Statistics Agency, which pointed to a lower total area allocated to winter and spring wheat than SovEcon had initially estimated. 

Lower-than-expected yields were also said to have influenced the downward revision. More specifically, the wheat harvest forecasts for the Southern and Central Federal Districts were reduced by 700,000t to 17.5Mt and 32.5Mt respectively, due to the persistent dry weather, while the estimate for the Volga Federal District was increased by 500,000t to 18.3Mt.  

Whatever the final number, wheat output this year will be significantly lower than the 2023-24 harvest of 92.8Mt and, unless there is a significant turnaround in the spring wheat yields as harvest moves east through the Urals and Siberia, will remain below the five-year average of 86.7Mt.

Exports look slower, lower

In the first two months of the 2024-25 marketing year, SovEcon expects Russia to export 8.2Mt of wheat, down from 9.8Mt for the same period last year. Its full-year wheat export forecast currently stands at 48.8Mt, down from 52.4Mt in 2023-24. In the USDA’s global supply-and-demand update released August 12, it had this season’s wheat exports pegged at 48Mt from total production of 83Mt. 

Meanwhile, Russian wheat exports in the 2023-24 marketing year reached a new high. Shipments from the country’s deep-sea ports increased 6.9pc from 39.1Mt in 2022-23 to 41.8Mt last season. Furthermore, considering all export modes and routes, Russian analytical agency Rusagrotrans believes full-season wheat exports were more than 55.4Mt, 23.9pc higher than the previous season’s mark of 44.7t. 

Grain Gates, a company linked to the state-backed trading house Demetra, was the leading wheat exporter in 2023-24, shipping more than 12Mt. This came after the private trader TD Rif, the leading exporter for almost a decade, fell foul of government authorities who subsequently withheld vital phytosanitary export documentation. A further escalation in the dispute led to a significant reduction in the company’s second-half export quota, resulting in full-year exports of only 7.3Mt. TD Rif has not been sighted in the Russian export market since early May.

Mixed moves for destinations

While the two biggest destinations for Russian wheat were unchanged, confidence in the quality and reliability of supply saw several Asian importers figure prominently in the export data. Egypt remained the major destination, buying 8.2Mt from Black Sea ports and shipped 400,000t on smaller coaster vessels from Azov Sea shallower ports, compared to a total task of 8.7Mt in 2022-23. 

The Republic of Türkiye was second with 7Mt, but this was 23.9pc lower than the previous season’s purchases of 9.2Mt. Shipments to Türkiye via Russia’s deep-water ports on the Black Sea reportedly more than halved from 6.75Mt in 2022-23 to just 3.3Mt last season. 

Third was Bangladesh with 3.8Mt, more than double that of the previous season when shipments totalled almost 1.6t. Iran, previously third, saw its imports halve to 1.3Mt in the wake of lower demand and payment issues. 

Indonesian imports rose from 168,000t in 2022-23 to 1.6Mt last year, while the Pakistan program was close to unchanged year on year at 1.6Mt. Russian wheat exports to African destinations, excluding Egypt, increased by 23pc in 2023-24 to 8.2Mt, with Morocco the biggest customer, purchasing almost 320,000t.