Russian grain exporters to supply directly to 13 countries, bypassing foreign traders

Russian exporters will directly supply grain to 13 countries without foreign intermediaries, the Russian Grain Union told Interfax news agency.

The decision follows an Oct. 11 meeting where a recommendation stated that exporters would restrict sales exclusively to them, with a commitment not to sell Russian grain to foreign tender winners. This new strategy aims to deter low-priced sales and eliminate the practice of intermediaries reselling Russian grains.

From Oct. 11, shipments will be made directly to government agencies and sovereign buyers in Egypt, Tunisia, Algeria, Morocco, Jordan, Saudi Arabia, Bangladesh, Qatar, Kuwait, South Korea, Pakistan, India and Iraq, according to the union’s CEO Eduard Zernin.

Traders reacted to the news, noting that the flow of Russian grain is becoming more restrictive and controlled, particularly as state agencies emerge as the largest buyers of wheat globally, with Egypt leading in imports at 2.9 million mt in the 2024-25 season (July-September) so far. The country’s state board GASC purchased at least 60% of total wheat imports in the previous 2023-24 marketing year.

“It will be interesting to see how the market will react and how Russian exporters can supply by themselves all the export surplus,” one buyer of Russian wheat said. “It is time for the market to reassess the flows.”

“It will be somber news for some players,” another buyer added.

“It is a big deal. Russians would need to create the structure and infrastructure to accommodate the changes and only a few companies can be involved,” a third trader said.

The Russian Ministry of Agriculture supported the union’s proposal to promote direct sales for exports, ensuring that “Russian grain should be supplied to consumers only by Russian exporters.”

The union said Oct. 11 that “the vicious practice of recent months, caused by the vigorous activity and dumping of some new exporters, must be eradicated.” This initiative aims to discourage the sale of Russian grain at low prices, especially since Russian wheat is currently the cheapest in the Black Sea region.

Multinational companies exited the Russian grains market in July 2023, selling their assets and shifting focus to other origins. Consequently, Russian grain exports are now concentrated in a small number of exporters.

Despite this shift, some traders and intermediaries continue to purchase Russian grain on a FOB basis for resale in the international markets.

Price floor
The Russian Grain Union published Oct. 15 indicative prices for the export of Russian wheat for October, November and December. For Russian wheat with 12.5% protein, the price is at FOB $240/mt for October shipments, $245/mt for November and at $250/mt for December.

Platts, part of S&P Global Commodity Insights, assessed the price of 12.5% Russian wheat for November shipment at $237/mt on Oct. 18, up 1.28% on the week, marking the highest price in three months.

There has been an unofficial reported minimum price floor for wheat exports in tenders at $250/mt. This is not the first attempt by the government to impose a price floor. In March 2023, an unofficial price floor was first known to the market at $275 FOB/mt, with the level varying over time.

Evidence of this was seen in Egypt’s GASC tenders, where all Russian cargoes were priced at the floor.

Traders said at the time that selling below this floor could lead to issues with phytosanitary certificates. Many sellers managed to bypass these restrictions by selling on a CIF basis, and traders expect similar methods to be used this time.
Source: Platts