Russia targets Asia with cheap wheat

Russia, the world’s second-biggest wheat exporter before halting sales last year, is offering the largest discount on the grain in at least four years and targeting buyers in Southeast Asia to regain its share of the world market after lifting an export ban a month ago.

Russian wheat costs at least $40 a metric ton less than North American, French or Australian supplies, according to the Moscow-based Institute for Agricultural Market Studies researcher, also known as IKAR. That makes shipping to countries such as Malaysia viable after freight rates fell 44 percent in the past 12 months, reported Bloomberg.

Russia’s grain exports in July probably rose to 2 million tons, the highest monthly shipments on record, according to IKAR and Moscow-based agriculture researcher SovEcon. Exports to long-haul destinations such as Southeast Asia and southern Africa may reach as much as 1 million tons in the 12 months that end June 30, compared with the previous record of 650,000 tons in the 2009-2010 season, according to IKAR.

“Russia is offering such a big discount that it allows the grain to travel these crazy distances,” said Dmitry Rylko, director of IKAR. “Buying Russian wheat may be cheaper than Australian.”