7 Reasons Why Russia is the Biggest Wheat Exporter in the World

Wheat is one of the most important crops in the world, providing food for billions of people. It is also a major commodity in the global trade, with many countries relying on wheat imports to meet their domestic demand. But which country is the biggest wheat exporter in the world? According to the latest data from the Food and Agriculture Organization (FAO), the answer is Russia.

Russia exported 27.4 million tons of wheat in 2021, worth $7.3 billion, making it the largest wheat exporter by both volume and value. Russia accounted for nearly 24% of the total wheat exports of the top 20 countries, followed by Australia (22.5%), the United States (21.1%), Canada (18.9%) and Ukraine (17.1%).

But how did Russia become the world’s top wheat exporter? Here are seven reasons why:

1. Favorable climate and soil conditions.

Russia has a vast territory that spans different climatic zones, from temperate to continental. This allows it to grow different varieties of wheat that are adapted to various conditions, such as winter wheat, spring wheat and durum wheat. Russia also has fertile black earth soils that are rich in organic matter and nutrients, ideal for wheat cultivation.

2. Increased production and yield.

Russia has significantly increased its wheat production and yield in recent years, thanks to improved agricultural practices, modernization of equipment, adoption of new technologies and better seeds. According to the FAO, Russia’s wheat production rose from 61.7 million tons in 2016 to 85.9 million tons in 2021, while its yield increased from 2.5 tons per hectare to 3.4 tons per hectare in the same period.

3. Competitive prices and quality.

Russia’s wheat exports are attractive to many buyers because of their competitive prices and quality. Russia’s wheat prices are lower than those of other major exporters, such as the United States and Canada, due to lower production costs, exchange rate fluctuations and government policies. Russia’s wheat quality is also high, meeting the standards and preferences of different markets, such as high-protein wheat for bread making and low-protein wheat for animal feed.

4. Diversified markets and destinations.

Russia’s wheat exports are diversified across different regions and countries, reducing its dependence on any single market or buyer. According to the OEC, Russia’s top five wheat export destinations in 2021 were Egypt (14%), Turkey (11%), Bangladesh (8%), Nigeria (6%) and China (5%). Russia also exported wheat to other countries in Asia, Africa, Europe and Latin America, expanding its presence and influence in the global wheat trade.

5. Strong demand and consumption.

Russia’s wheat exports are driven by strong demand and consumption from both domestic and international markets. On the domestic front, Russia’s population of about 146 million people consumes about 40 million tons of wheat per year, mainly for bread, pasta, pastries and other products. On the international front, Russia’s wheat exports are boosted by growing demand from developing countries, especially in Asia and Africa, where population growth, urbanization, income growth and dietary changes increase the consumption of wheat-based foods.

6. Supportive government policies and incentives.

Russia’s wheat exports are supported by various government policies and incentives that aim to promote the development of the agricultural sector and enhance its competitiveness in the global market. Some of these policies include subsidies for farmers, tax exemptions for exporters, infrastructure development for transport and storage, quality control and certification systems for products, trade agreements and cooperation with other countries and organizations.

7. Resilience to challenges and risks.

Russia’s wheat exports are resilient to various challenges and risks that may affect its production and trade, such as weather shocks, pests and diseases, trade disputes and sanctions, political instability and conflicts. Russia has demonstrated its ability to cope with these challenges and risks by adopting adaptive strategies, such as diversifying its crops and markets, improving its risk management and insurance systems, strengthening its food security and sovereignty, and maintaining its diplomatic relations.

These are some of the reasons why Russia is the biggest wheat exporter in the world today. However, this does not mean that Russia’s position is secure or uncontested. There are many factors that may affect its future performance and prospects, such as climate change, environmental degradation, resource constraints, competition from other producers, changing consumer preferences, market volatility and uncertainty.

Therefore, Russia needs to continue to improve its productivity and efficiency, invest in research and innovation, ensure its sustainability and quality standards, and foster its collaboration and cooperation with other stakeholders in the global wheat value chain.

The Global Wheat Trade: Trends and Challenges

Wheat is one of the most important crops in the world, providing food and income for millions of people. According to the Food and Agriculture Organization (FAO), wheat production reached 776 million tons in 2021, making it the second most produced cereal after maize. Wheat is also one of the biggest crops in the international grain trade, alongside other crops like maize, rice and soybean. In this blog post, we will explore some of the trends and challenges of the global wheat trade, based on the latest data and statistics.

The Top Wheat Exporters and Importers

The global wheat trade is dominated by a few major players, who account for most of the exports and imports of this commodity. According to FAOSTAT, the top five wheat exporters in 2021 were:

Russia: 27.4 million tons, worth $7.3 billion
Australia: 25.6 million tons, worth $7.1 billion
United States: 24 million tons, worth $7.3 billion
Canada: 21.5 million tons, worth $6.6 billion
Ukraine: 19.4 million tons, worth $4.7 billion

These five countries exported more than 70% of the total wheat exports in 2021, which amounted to 174 million tons, worth $66.2 billion. Russia was the largest wheat exporter in the world, accounting for nearly 24% of the total exports.

On the other hand, the top five wheat importers in 2021 were:

Egypt: 13.3 million tons, worth $3.5 billion
Indonesia: 11.2 million tons, worth $2.9 billion
Turkey: 10.8 million tons, worth $2.8 billion
Brazil: 7.9 million tons, worth $2 billion
Bangladesh: 7.8 million tons, worth $2 billion

These five countries imported more than 40% of the total wheat imports in 2021, which amounted to 179 million tons, worth $47.4 billion. Egypt was the largest wheat importer in the world, accounting for nearly 14% of the total imports.

The Impact of COVID-19 on the Wheat Trade

The COVID-19 pandemic has had a significant impact on the global wheat trade, affecting both supply and demand factors. On the supply side, some wheat-producing countries faced disruptions in their logistics and transportation systems, as well as labor shortages and lockdown measures that affected their harvesting and milling activities. For example, India imposed a nationwide lockdown in March 2020 that hampered its wheat exports for several months. On the other hand, some wheat-exporting countries increased their production and exports to take advantage of the high global prices and demand for wheat during the pandemic. For example, Australia had a record wheat harvest in 2020/21 after recovering from a severe drought that affected its output in previous years.

On the demand side, some wheat-importing countries increased their purchases of wheat to ensure their food security and meet the rising consumption of wheat products during the pandemic. For example, Egypt increased its strategic wheat reserves from three to six months in 2020 to cope with any potential supply shocks or shortages. On the other hand, some wheat-importing countries reduced their demand for wheat due to lower incomes and reduced economic activity during the pandemic. For example, Brazil reduced its wheat imports by 14% in 2020 compared to 2019 due to its economic recession and currency depreciation.

The Future Outlook of the Wheat Trade

The global wheat trade is expected to face several challenges and opportunities in the future, depending on various factors such as climate change, population growth, income levels, dietary preferences, trade policies and technological innovations.

One of the main challenges for the wheat trade is climate change, which poses risks for both wheat production and consumption. Climate change can affect wheat yields and quality by altering temperature, precipitation, pest and disease patterns and extreme weather events such as droughts and floods. Climate change can also affect wheat demand by changing consumer preferences and behavior due to health and environmental concerns.

One of the main opportunities for the wheat trade is population growth, which creates more demand for food and feed products derived from wheat. According to the United Nations (UN), the world population is projected to reach 9.7 billion by 2050, with most of the growth occurring in developing regions such as Africa and Asia. These regions have high rates of urbanization and income growth, which tend to increase their consumption of wheat products such as breads, noodles and pastries.

Another opportunity for the wheat trade is technological innovation, which can enhance both wheat production and consumption by improving efficiency, quality and sustainability. Technological innovation can include advances in biotechnology, digitalization, automation, precision agriculture and food processing. For example, biotechnology can develop new wheat varieties that are more resilient to climate change and pests and diseases. Digitalization can improve the traceability and transparency of the wheat supply chain and facilitate trade facilitation and market access. Automation can reduce labor costs and increase productivity and safety in wheat harvesting and milling. Precision agriculture can optimize the use of inputs such as water, fertilizer and pesticides in wheat cultivation. Food processing can create new and value-added wheat products that cater to different consumer preferences and needs.

References:

http://www.fao.org/faostat/en/#data/TP

https://beef2live.com/story-top-20-largest-wheat-exporters-world-0-206491https://www.weforum.org/agenda/2022/08/top-10-countries-produce-most-wheat/

https://www.aljazeera.com/news/2022/2/17/infographic-russia-ukraine-and-the-global-wheat-supply-interactive
https://www.worldstopexports.com/wheat-exports-country/
https://en.wikipedia.org/wiki/List_of_countries_by_wheat_exports
https://beef2live.com/story-top-20-largest-wheat-exporters-world-0-206491
https://www.weforum.org/agenda/2022/08/top-10-countries-produce-most-wheat/
https://www.aljazeera.com/news/2022/2/17/infographic-russia-ukraine-and-the-global-wheat-supply-interactive