Russia’s influence on the world wheat market, a problem for Argentina’s exporters

Despite declining international wheat prices, Russia has been exporting wheat at record levels this season, ahead of a quota set to take effect on February 15. The quota is part of the government’s strategy to bolster domestic supply and curb inflation, which currently stands at 9.5%.

However the surge in Russian exports is anticipated to have significant repercussions for South America, particularly for Argentina, one of the region’s largest wheat exporters. With an economy already strained by a dollar shortage, Argentina heavily relies on its exports to generate foreign currency. Increased Russian supply at competitive prices may pressure Argentine producers and exacerbate the country’s economic challenges.

The fact is that Russia is planning to export a record 29.4 million metric tons of wheat in the first half of the 2024/25 export season, according to analysts at the rail logistics company Rusagrotrans. The forecast was revised upward, reflecting the robust export performance, despite low global prices.

The Russian government plans to impose a 10.6 million tons export quota from February 15 to June 30, 2025, during the second half of the season.

In December, Rusagrotrans adjusted its monthly export projection for December 2024 from 3.4/3.5 million tons to 3.7/3.8 million tons. While this figure is slightly below the 4.06 million tons exported in December 2023, it includes shipments to countries within the Eurasian Economic Union (EAEU).

In the 2023/24 export season, Russia shipped 27.7 million tons in the first half, a benchmark expected to be surpassed this season.

While Russia’s 2024 wheat harvest is projected at 83 million tons—down from 92.8 million tons in 2023—the country continues to dominate the global wheat export market, demonstrating its ability to meet strong international demand.

These figures cement Russia’s position as one of the world’s leading wheat suppliers. They intensify competition in the global market and place additional pressure on exporters in regions like South America during heightened market rivalry.

Tags: export, prices, wheat, quota, Market, Argentina, projection, Russia