Wheat exports from Russia, the world's largest supplier, will be close to record highs in December, if disruptions caused by storms in its main sea route the Black Sea are limited, analysts and an association of exporters said.
Over the entire 2022/23 July-June marketing season, however, Russia is likely to export less than its huge crop would potentially allow because of complications related to Western sanctions imposed on Moscow, some added.
Although the curbs do not target grain, Russian officials have said sanctions imposed on the Russian financial sector over what Moscow calls a special military operation in Ukraine have made it harder for grain exporters to process payments in banks and obtain 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 levels, 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 social media on Wednesday.
Russia's total grain exports, excluding supplies to Kazakhstan, Armenia and Belarus, are expected to reach 26 million tonnes in July-December, up 10% from a year ago, the association added.
"This is certainly not bad, but the potential of the current season is much higher. Hopefully the [current] drop in global prices will boost demand and the weakening of the rouble will improve sales margins."
On Track For Record Crop
Russia is on track to harvest a record grain crop of 150 million tonnes, including 100 million tonnes of wheat, in 2022.
According to the group, the challenge for the second half of the season - January-June - will be difficulties associated with processing payments if Western sanctions are expanded.
Egypt and Turkey are traditionally the biggest buyers of Russian wheat, but no official data is available this year as Moscow suspended publication of its export and import data to avoid 'speculation' after it sent troops to Ukraine on 24 February.
Since the start of the season on July 1, Russia sold more wheat than in any previous season to Saudi Arabia, Algeria, Pakistan, Brazil and Mexico, analysts at Russian rail operator Rusagrotrans said in a note.
Russia also resumed wheat supplies to Iraq after a 10-year pause, Rusagrotrans added.
Sanctions Cause Some Losses
Sovecon and another consultancy IKAR see December wheat exports at 4.0-4.2 million tonnes.
That is close to the record of 4.3 million tonnes set in December, 2017, Sovecon said, adding that Russia exported 4.3 million tonnes of wheat in November.
Some traders temporarily stopped purchases from farmers in Russia's south last week, as storms complicated loading of vessels in ports, it added.
"We could repeat 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 about 23.5 million tonnes. It will be still technically possible, but quite difficult to reach our seasonal target of 44 million tonnes."
Sovecon expects Russia's July-December wheat exports at 22.9 million tonnes, up 2% year-on-year and equal to the average of the past five years.
It estimates Russia's total 2022/23 grain exports at 56.1 million tonnes, including 43.7 million of wheat.
State-controlled trader United Grain Company expects Russia's 2022/23 grain exports at 53-54 million tonnes, its deputy head Ksenia Bolomatova said last week, having picked up pace after a sluggish start to the season.
Without sanctions-related curbs, they would be over 60 million tonnes, she added.