Russia outpaced the United States last season in wheat exports for the first time in decades and is forecast to secure its position this year as the world’s largest wheat exporter.
Good weather and effective management were credited with producing a record harvest this year and getting it onto world markets.
Russia’s Ministry of Agriculture said the overall grain harvest for 2016 is expected to be the biggest in four decades.
Grain production is projected to be more than 110 million tons, with 72 million of it being wheat.
The ministry said Russia plans to export 28 million tons of wheat in the 2016-2017 agricultural year.
Russia’s shrinking economy means there is less financing available for agriculture, says the president of Russia’s Grain Union Arkady Zolochevsky.
There is, however, an upside. “At the same time the ruble downfall caused by the sanctions policy has improved their competitiveness in the foreign markets and became a basis for record wheat exports last season. And, this factor still continues.”
But Russia’s dramatic rise to the top of world wheat exports has been accompanied by a drop in the overall quality of grain being produced.
Grain market experts say the unexpected reduction in the quality of Russian wheat exports was one factor that shrank earlier forecasts this year from an even higher expected 30 million tons.
“It always happens when the crop is big that the quality of wheat is lower,” says Zolochevsky. “But that doesn't mean that we'll have fewer high-quality resources. It means that percentage-wise, its share becomes less. But in numbers, in quantity, the high quality wheat may be of the same amount as last year when the crop was not very big. Perhaps even more.”
“Animal feed” wheat
The greater share of lower quality wheat includes “fifth class” grain usually sold as animal feed.
Russian media expressed some alarm at reports of animal feed quality wheat being mixed with higher quality wheat to make flour for bread sold domestically.
“The fact that lower-quality grain of the 5th class, sometimes the fodder grain is used in making flour is not new and is known since the Soviet times,” says Zolochevsky. “The cost of food in Russia is cheap, unjustifiably cheaply. It is impossible to get good quality in a cheap product.”
Zolochevsky says lower quality wheat does not pose any risk to health, it simply has less protein and less flavor; a small problem for factories producing cheap loaves of bread, but a bigger concern for Russia’s bakeries.
“I’d say that I haven't noticed much of it. But we are constantly watching the flour quality,” says bakery owner Sergey Zhuravliov. “If it gets worse, we start using another brand. We are constantly looking for new suppliers, for those who will provide a good quality and a good price.”
To improve bread quality, Russian authorities should end price controls, argues Zolochevsky, and instead offer direct assistance to those in need.
A shift from subsidizing grain producers to increasing market competition and consumer purchasing power, he says, would also ensure a healthier economy.