Last week Russia shipped another large consignment of wheat to Egypt. Experts say that with this country’s growing investment in grain infrastructure, Russia may soon overtake Europe as the world’s second biggest wheat exporter after the United States.
Egypt is the biggest buyer of Russian grain purchasing about 3 million tonnes and more every year. According to Reuters, since the start of the current financial year in July of 2009 Egyptian state’s main wheat buying agency General Authority for Supply of Commodities has purchased 4.75 million tonnes of wheat, of which 55% came from Russia, 28.4% – from the United States and 8.6% from France. Anton Shaparin, press secretary of the Grain Union of Russia says the deal was a new evidence of competitiveness of Russian produce.
“It also signifies that quite often the buyers prefer to deal with Russia. The grain market now is the buyer’s market, which means that because of the overabundance of grain the buyer can make the choice, and right now, thanks to investments in grain infrastructure, including a new terminal at the Black Sea port of Tuapse. Indeed, thanks to Tuapse’s proximity to Egypt, Russian freight rates are seriously competitive. And the new Egypt’s regulation demands that not less than 60,000 tonnes of grain be loaded at a single port. Take the French port of Rouen is too shallow to load such volumes, thus reinforcing competitiveness of the Russian wheat. With two other, shallower ports in Rostov and Taganrog Russia may export up to 30 million tonnes of wheat this year,” said Anton Shaparin.
Last week the Russian Grain Union held a conference in Singapore to attract buyers from South Eastern countries. President of the Russian Grain Union Arkady Zlochevsky said at the conference that in the 5 coming years Russia plans to increase its exports of grain by 32%.
“More than 200 attendees included exporters and importers of grain from Japan, Korea, the Philippines, Indonesia and others, more than 20 countries in all. We gathered this conference to tell Asian buyers, whose grain market amounts to 25% of the world market, and it is growing fast. The biggest drawback is that Asian processing businesses do not have big enough capacity to store the grain, so the shipments are usually not very large,” said Anton Shaparin of the Russian Grain Union.
President Dmitry Medvedev recently made orders to arrange a freight corridor in the East of Russia to export grain to Asia. In its absence current supplies are from the Black Sea port of Novorossiisk. But they go on, thus showing that even at higher freight rates Russian wheat is quite competitive there, too.
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