(Bloomberg) — Russia’s union of grain exporters called for foreign traders and intermediaries to be ousted from the country’s export sales, as Moscow continues to try and tighten its grip on flows.
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“The Union of Grain Exporters does not see the economic feasibility of attracting foreign traders and assorted intermediaries to supply Russian grain to international customers,” the group said on Telegram, adding that it had the support of the country’s agriculture ministry in its efforts. The ministry didn’t immediately reply to a request for comment.
While major Western merchants stopped originating grain for export in Russia after facing government pressure in the wake of the invasion of Ukraine, the traders can still buy cargoes of Russian grain from other firms. Those transactions still typically occur at large volumes.
The Russian grain industry has grown increasingly consolidated after Western merchants pulled back and as the country’s top private trader faced a spat with the state. That put the market in the hands of fewer companies, some of which have or had links to the Kremlin.
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Russia is the world’s biggest wheat exporter and any disruptions to its export flows would boost costs of the staple grain for buyers from Africa to Asia. Wheat also remains a major source of export revenue and political influence for the nation in the midst of its invasion of Ukraine, as food isn’t directly sanctioned.
The union said that exporters had agreed not to provide Russian grain to foreign winners of tenders, during a meeting on the sidelines of the Golden Autumn exhibition in Moscow this week. It also criticized new exporters for “dumping” of grain and said that such practices must be eradicated.
While wheat supplies in the country remain large, farmers reaped a smaller harvest this year amid frost and dry weather, breaking a streak of bumper production. Russia normally limits exports in the latter part of the season from February to June, with allowances allocated based on the volume traders exported in the first half. Quotas have not been restrictive in recent seasons.
Still, Moscow’s exports at the start of the season have matched last year’s record volumes, which was expected to restrain shipments later on.
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