Market Morsel: Who are Russia’s grain mates?
The invasion of Ukraine continues, and as Russian troops leave occupied areas horrific images are being released of the atrocities being committed. We have covered off on sanctions before in Rushin’ to a sanction.
I am not convinced that sanctions work, and it seems they are largely ineffectual when it comes to limiting the export of grains.This is covered by contributor Andre Sizov covered today in Russian exports continue despite war.
Dmitry Medvedev, the former Russian president, made some pointed comments about their agricultural exports:
“We will only be supplying food and agriculture producers to our friends, fortunately we have plenty of them, and they are not in EU or America”
I had a look at the Russian wheat exports and booked vessels for March/April, using information from our data partners at AgFlow. According to their trade flow data, 2.4 either left during March or is booked for April.
Russian exports of wheat tend to head into North Africa and the Middle East, which makes sense due to the geographic location. This appears to be the case still, although a few European nations (and Israel) have also shipped since the start of the conflict.
At the start of this conflict, I said that these trade flows would likely continue, as these nations cannot afford to ‘shop around’ too much for wheat. So far, these trade flows remain in place.
These countries have food security issues that they have to fix locally before they can even contemplate any form of sanction (see Hunger Grains). It will therefore be unlikely, and Russian will still be able to generate income from the sale of wheat.
Russia’s grain mates will continue for some time. There is an old saying, you can’t choose your family, but you can choose your friends.