MOSCOW, Russia – Exports of Russian wheat harvested this summer for the 2022-2023 marketing season are unlikely to meet expected record crop supply as banks, shippers and insurers remain in place despite U.S. pledges on sanctions, traders said .
The West imposed a series of sanctions on Russia after Moscow decided to send troops to Ukraine, and although food exports were barred, the measures created difficulties in financing deals and arranging freight and insurance for the cargo. .
In a bid to freeze exports amid the global food crisis, the United States issued a clarification in July, assuring banks, shipping companies and insurance companies that transactions for Russian food and fertilizer exports do not violate Washington’s sanctions against Moscow. will do
Despite a challenging environment, wheat exports for the 2021-2022 marketing season were broadly in line with pre-crisis forecasts, fueled by higher global prices and demand from customers unable to source cargo from Ukraine.
However, the sharp drop in global prices in recent months has resulted in higher financing costs and freight is now beginning to have a significant adverse effect on deliveries.
The International Grain Council estimates that Russia exported 33.0 million tonnes of wheat in the 2021-2022 (July/June) season, slightly less than the 33.3 million estimated in its February report – just days before Russia Vortag published what he calls his “special army”. Operation “in Ukraine.
The 2022-2023 season started in July with the prospect of an export boom following a bumper harvest.
According to traders’ estimates, Russia has not released any export or import data since February but could export 4 million tons in August, up from 2 million tons in July.
Traders said it is less than the country in terms of port capacity and its huge harvest.
Russia exported 5.2 million tons of wheat in August 2021.
For Russian grain traders, US assurances are not the measures they expected, as many market participants are still reluctant to work with Russia over fears of secondary sanctions.
“All these statements are made that it is possible to work with food supplies from Russia, half a percent brings progress. I haven’t seen any relief yet. Nothing changes,” said the Russia-focused businessman.
He said: “If the banks we’ve worked with for many years call and say ‘okay hello again, Chalo money is flowing’, that would mean a change, but no, that’s not happening. Is.”
Russian grain traders still pay premiums for freight and insurance. It is also difficult for them to find large ships or find a bank that will provide letters of credit for trade finance or shipments.
Banks who work with them conduct additional investigations and require traders to provide detailed documents about firms that produced or transported grain within Russia, the trader said, further complicating the process. .
Ukraine has accused Russia of stealing grain from Russian-held territories since February 24. Moscow has denied this.
Grain exporters of the Russian Federation argue that the West has the necessary tools to resume financial service for grain shipments from Russia. Along with Russian officials, the union is calling for the removal of “invisible barriers” to Russian grain.
“There are some breaks, but not enough for normal work. We do not agree that officials cannot influence the work of their banks and insurance companies. Every country has a financial regulator that regulates the activities of financial institutions. But progress needs good will, not formal slogans,” said the head of the association, Eduard Zernin, to Reuters.
Deal not fully implemented
Russia, Ukraine, the United Nations and Turkey signed an agreement in July aimed at resuming large-scale grain exports from Ukraine, which have been blocked since February 24.
Russia backed the deal after the United Nations pledged to facilitate free access to world markets for Russian fertilizers and grain products.
Moscow has yet to complete the part of the deal that worries it.
“The package of documents signed in Istanbul included not only agreements on the export of grain from three Ukrainian ports, which began a week and a half ago, but also on the promotion of Russian food and fertilizers on world markets, which is currently not taking place. implemented,” Russian Foreign Ministry official Ivan Nechayev said Thursday, April 11.
The favorable harvest season has helped Russia rake in a sizeable wheat harvest, potentially a boon to Middle East and African importers who rely heavily on supplies from one of the world’s top exporters.
Agricultural adviser ICAR currently expects Russia to produce a record wheat crop of 95 million tons this year, up from 76 million tons in 2021. – rapper.com