RUSSIA has exported record quantities of wheat in the 2022-23 trading year that ended in June, solidifying its standing as the world’s largest supplier of the grain.

It is estimated to have exported 45.5m tonnes, given ample harvests and no export restrictions for the entire year, combined with competitive pricing, according to the US Department of Agriculture.

Primary destinations include countries in the Middle East, North Africa, and Central Asia, it said in a new monthly trade report. 

While record production of 92m tonnes was seen in the 2022-23 season, output is estimated to fall to 85m tonnes in the new 2023-24 season, which runs from July to June, it said.

However, large carry-over stocks will ensure that Russia wheat supplies will remain above 100m tonnes for the second year in a row.

With import demand remaining strong in many of its top buyers, such as Egypt, Iran and Algeria, Russia’s wheat exports are forecast to reach another record of 47.5m tonnes in this trading year, it added.

Russia’s higher exports have helped the dry bulk market, as India and China pick up more volume, adding to tonne-miles. Reduced supplies have been seen from Russia to Europe amid self-sanctioning by many companies, as well as official sanctions targeting payment systems and individuals in response to the situation in Ukraine.

By contrast, Ukraine’s planted area has dropped “significantly” as a result of the events in Ukraine, hurting bulker demand.

Production in 2023-24 is forecast at 17.5m tonnes, the smallest crop in over a decade, said the USDA.

With sharply reduced supplies and uncertainty surrounding the future of the Black Sea Grain Initiative, 2023-24 wheat exports from Ukraine are forecast at 10.5m tonnes, down over 40% from the five-year average prior to the situation nowadays, it said.

While the BSGI helped Ukraine export 16.8m tonnes of wheat in the 2022-23 season, 39% moved by land to Eastern European ports, with destinations shifting to Europe from predominantly Asia and North Africa before the military activity.

The shorter distances have had a negative effect on the bulker market.

The fate of the grain corridor, which expires next week after three extensions since launching in July of the past year, is looking bleak as Russia demands more leeway with its agri-goods and fertiliser exports.

With the growing uncertainty, no ships have been processed through the grain corridor since June 26. Those vessels employed in the grain passageway have been older and smaller than in a typical year, with owners largely less recognised.

The European Union is now considering allowing Russia’s Agricultural Bank to set up a subsidiary to access the SWIFT global payment system. Whether this move will appease Russia enough to continue the grain deal remains to be seen.

Data provider Shipfix noted that cargo order volumes for agricultural commodities loading in ports in Romania, Poland and Croatia, have seen a pick up in the past week, with aggregate volumes almost 60% higher week on week. 

Danube ports have taken centre stage given the faltering grain deal, with works being carried out to expand capacity.