UNITED STATES SURRENDERS TO RUSSIAN REVOLUTION IN GRAIN MARKET




Robert Harneis –TDO- (FRANCE)- U.S. Wheat Associates is to close its offices in Russia responsible for wheat exports. They have issued a statement saying that it is “part of an ongoing restructuring of overseas offices designed to refocus resources toward markets with the best potential to grow U.S. wheat exports and returns for the farmers USW represents.”

U.S. Wheat Associates develops, maintains and expands international markets to enhance wheat’s profitability for U.S. farmers and its value for their customers in more than 100 countries. Funding comes partly from a fund managed by 17 state wheat commissions and partly from the U.S. Department of Agriculture’s Foreign Agricultural Service.

The Russian Federation, once a net importer of wheat, has become the world’s largest wheat-exporting country. As Russia’s domestic wheat production increased, U.S. Wheat Associate’s mission shifted to monitoring that production, as well as Russian wheat quality, prices and policy, U.S. Wheat Associates says.

Now, “With much more public information available about Russia’s wheat supply, we believe it is time to end our mission there and continue allocating more resources in markets where our export volume is growing,” USW vice president of overseas operations Mark Fowler said in a prepared statement.

“Russian wheat is obviously very competitive in certain markets, but it is important to point out that our marketing and technical teams based in Rotterdam, The Netherlands, and Casablanca, Morocco, will continue competing for export business in the Middle East and North Africa,” Fowler said.

Based in part on the significant increase in low-priced Russian wheat exports, USW closed an office in Cairo, Egypt, in December 2017, eliminating four staff positions. The Moscow office closing will eliminate the position of officer director and marketing specialist held by Valentina Shustova since 1995.

Russia has managed to capture more than half of the wheat market in recent years, becoming the world's biggest exporter of grain, thanks to bumper harvests and attractive pricing. . Since the early 2000s, its share of the world wheat market has quadrupled.

Russia's agriculture exports have surged by almost a third in the first five months of 2018. The country exported 29.5 percent more agriculture and food products, worth $9.5 billion, than in the same period last year. In particular, the export of wheat through May surged to 17.1 million tons worth $3.1 billion.

According to the director of the SovEcon analytical center, Andrey Sizov, Russia's agricultural export market is actively expanding. It supplies grain to Algeria, Jordan, Egypt, Lebanon, Turkey, and Iran, and Saudi Arabia has announced plans to become a major hub for Russian agricultural products in the Middle East.

Overall, agricultural production in Russia is projected to grow three percent this year, from last year's 120.7 million tons. That would be the best-ever harvest for Russia, even counting the Soviet era with a much bigger land mass.

The US Moscow Wheat Associates office opened in 1992 and its closure marks a considerable economic milestone for Russia.