Paris (AFP) – Russia, the world’s leading exporter of wheat, reinforces its dominant position in the Black Sea and seeks to redesign the routes of this grain used for bread thanks to exceptional harvests and aggressive prices.
“Russia alone guarantees a quarter of world wheat exports, and has corresponding reserves,” says Sébastien Abis, author of ‘Géopolitique du blé’ (Geopolitics of wheat) and researcher at the French Institute for International and Strategic Relations (IRIS). .
The war in the Ukraine opened up new routes, such as the Danube river routes. This allowed Kiev to continue exporting grains despite the suspension in mid-July of the Black Sea grain agreement, which Turkey seeks to resume and for which it is preparing “a set of proposals” together with the UN, its government said on Monday, September 4. President Recep Tayyip Erdogan after a meeting with his Russian counterpart Vladimir Putin.
But above all the conflict that began in February 2022 cements Russian dominance over the global wheat trade.
For one thing, waterways remain “fragile” as they are regularly bombarded, recalls economist Joseph Glauber of the International Food Policy Research Institute (IFPRI) in Washington.
On the other hand, although the maritime corridor “allowed the removal of close to 33 million tons of agricultural products from the country” in one year, “it did not help Ukraine to recover in terms of agricultural production, as a result of the war itself”, which amputated a quarter of their arable land, he explains.
agricultural reorganization
In 2023-2024, world wheat production should be less abundant than the previous crop, partly as a consequence of weather events in Canada and Australia. Consumption estimates are higher than production estimates by 20 million tons (MT).
In this context, “the world expects 45 MT of Russian wheat to reach the market,” underlines David Laborde, director of the economics division of the UN Food and Agriculture Organization (FAO).
This Russian dominance has its history: “55 years ago, half of the wheat exported in the world came from the United States. In the last 50 years, we have seen a diversification of the world market,” says the economist.
US hegemony was progressively “questioned by exports from Western Europe -which was rising from World War II-, then by countries like Argentina and Australia, and from the 2000s onwards by the rise of the Black Sea pole”, he continues.
Russia, a net importer of wheat 25 years ago, after the collapse of the Soviet bloc, recovered to become the world’s leading exporter in 2016.
Agriculture became the country’s third largest business sector, behind energy and metals/minerals, and ahead of weapons: “Russia rearmed its agriculture”, sums up Sébastien Abis.
With the war, “everything accelerated”, underlines this researcher. “Corn Russia ‘Russified’ its wheat diplomacy: we are no longer subject to the rules of the market”.
When the Black Sea grain deal came to an end, Putin promised free deliveries to six African countries (accounting for less than 1% of Russian exports), preferential tariffs for friendly Egypt, and keeping prices low to preserve a competitive advantage.
Moscow “draws new maps, both strategically because it does not play with the same tools (as the other players in the market), but also based on the fact that Russia is the only one that produces more and exports more. The only country that competed with Russia in terms of trend was Ukraine“, emphasizes Abis.
“Neutral” importers
This hegemony has an important weight for countries like Egypt and Türkiyewhich are by far the first two importers of Russian wheat.
While the former imports 80% of its wheat from the Black Sea, the latter transforms the grain into flour to re-export it to the Middle East, Africa or Asia, Laborde specifies.
The most dependent countries are those that consume the most bread, such as those of the north of Africabut also Sri Lanka, bangladesh either Pakistan.
Russia’s weight traces trade routes “that are not logical in terms of geography,” says Abis. An example is that Morocco or Algeria, traditional clients of France, modified their import rules to be able to buy Russian wheat.
And, as Joseph Glauber indicates, since the start of the war, many importing countries in Africa have remained “neutral” in international forums so as not to offend the Russian giant, while at the same time defending the Black Sea grain deal.
This agreement is crucial for importers because, by favoring the mobility of wheat, it caused prices to fall after the spike in the spring of 2022.
Now, one of the great fears of the operators is an incident in the Black Sea, such as the bombing of a ship with grains and an excessive increase in insurance.
However, “the Russians are not interested in that,” as the Black Sea “must remain their exclusive corridor,” Abis says.
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