Russia’s Deputy Prime Minister Victoria Abramchenko told reporters after her report to the Duma (legislature), that Russia was considering banning wheat and fertilizer exports. Another source said the discussions included taking the government-owned wheat reserve from 3 million mts to 10 million.
After producing more wheat than ever before in 2022, Russia substantially increased its wheat export tax on January first and again, to a lesser extent, on February first. Around the middle of February, Putin announced to the world that Russia must increase its own grain reserves as a matter of national defense. Yet Russian officials were complaining the Ukraine corridor grain export deal was stealing Russia’s wheat export share. Russia’s wheat export pace went to a record large weekly tonnage by the end of February and continued to this week.
Was all of yesterday’s rhetoric a smokescreen to get wheat prices higher? We doubt it. We reported how raising the wheat export tax two consecutive months did not match up with a record large wheat harvest. Russia, like Brazil, does not have the infrastructure to handle a one year increase of an additional 15 million mts more than ever before. A lot of the crop has to be stored on the ground. Wheat does not store well on the ground in Russia.