Russian Wheat Export is a Problem for US Farmers
OREANDA-NEWS Despite the sharp decline in prices, Russian wheat exports are growing, and the harvest is increasing, which poses a threat to American farmers. It is reported by the Wall Street Journal.
According to the newspaper, Russia over the past agricultural year exported more than 40 million tons — about 50% more than last year, reaching the highest level for any country in the last quarter of the century. At the same time, Russia in 2016 was ahead of the US, taking first place in terms of wheat exports, repeating the record in 2018.
The WSJ notes that the rise in competition from Russia comes at a time when the US has seen the largest wave of farm closures since the 1980s. Also, global overproduction of grain led to a decrease in prices by about half in 2012, which made it difficult to make a profit in dollars.
The newspaper emphasizes that the US trade disputes with China and other countries can make Russian wheat more attractive to buyers. According to the Director of the Swiss firm Svitan Steele, China has introduced tariffs of 25% for wheat from the United States. However, so far Moscow has not been able to take advantage of this for profit. "The quality of [Russian grain] has become better, and it is cheaper," said Steele.
As the newspaper notes, the advantage of Russian grain is its price, which is associated with a decrease in the ruble against the dollar.
As previously reported, in 2017, Russia harvested a record grain harvest in the amount of 135.4 million ton. Harvest in 2018, according to the forecast of the Ministry of agriculture of the Russian Federation, is expected to reach 105 million tonnes.
In September, Deputy Prime Minister Alexei Gordeyev said that the government has lowered the forecast of grain exports in 2018 to 30 million tons. According to this information, projected the crop at 105 million tonnes is sufficient. At the end of August, analysts of the Ministry of agriculture reported that the European countries in which there was a drought, can increase purchases of grain from Russia.
The results of Russia's work on the grain market threaten the welfare of American farmers. Many American farmers are leaving the market.