Russian restrictions on wheat exports played into Ukraine’s hands

Russia’s wheat export restrictions inadvertently helped Ukraine secure lucrative sales to Egypt this week, Reuters reports, citing traders.

This week, GASC bought 290 thousand tons of wheat. The purchase included 120 thousand tons from Ukraine, as well as 120 thousand tons from Romania and 50 thousand tons from Bulgaria.

Russia was not allowed to participate in the sale due to an unofficial policy to prevent a price spike within the country.

Restrictions, mostly not officially announced, include a minimum export price, export duties and restrictions on the sale of Russian grain by foreign trading houses.

“Thanks to Russia’s steps, Ukrainian supplies look more attractive, especially for importers in a difficult financial situation, like Egypt,” the trader said.

A trader in Ukraine said that the Russian restrictions have provided more opportunities, although the country has already realized about 60% of its potential sales this year.

Hesham Soliman, a trader from Egypt, said Russia is dragging its feet, waiting for prices to rise and profitability to increase.

“It’s not just a restriction on Russian exports. Russia knows it controls the market and is acting accordingly,” he said.

Noamani Nasr, a former advisor to Egypt’s Ministry of Supply, said that Russia often imposes barriers to curb its own exports, whether to raise prices or for internal reasons.

“Ironically, this benefits Russian competitors,” he said.

Egypt’s Ministry of Supply said on Tuesday that after the purchase, it now has strategic reserves for five months of consumption, although traders expect it will need to secure additional supplies in the coming months.

“There is still supply in Romania, where farmers are storing a lot of their harvest. In Bulgaria, the supply is gradually decreasing. In Ukraine, there is not much left, although they have not been as active as the Russians,” said another European trader.

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Tags: wheat, restrictions, Ukraine, Russia, Egypt, export, prices