① Since the Russian-Ukrainian conflict, the Russian food market has been controlled by a small number of companies. This has strengthened the Russian government's supervision of the export market, but it has also had some side effects; ② Although global commodity traders are still trading food in the Russian market, they are unable to accurately understand the country's food situation, causing the global market to be in a tight state.
Finance Association, May 27 (Editor: Malan) Due to unexpected freezing damage, the Russian wheat harvest has fluctuated and caused waves in the global market, fully demonstrating the important position of Russian wheat in global trade.
But on the other hand, many commodity traders have warned that Russia is expanding its influence in the grain market. And this move is likely to further amplify the volatility brought about by Russian grain.
Currently, three quarters of grain exports from Russia's Black Sea terminals are controlled by four companies. This makes it easier for the Russian government to intervene in the export market and makes the local grain flow situation uncertain, thus amplifying market fears caused by poor harvests.
Dmitry Rylko, head of Russian consulting firm IKAR, said that the four largest Russian traders currently control 75% of exports from Russia's Black Sea terminals, a figure far higher than 45% six years ago. He warned that the grain market is being sharply consolidated and concentrated in the hands of a very small number of participants.
Market doubts deepened
Dan Basse, president of the Chicago consulting firm AgResource, warned that Russia's idea of increasing its influence on the commodity world is real and is strengthening its control over food.
Since the outbreak of the Russian-Ukrainian conflict, Russia has been buying the assets of overseas companies and some local companies, either nationalizing them or selling them to companies that the government trusts. This makes the role of government increasingly critical.
This also causes Western buyers to continue to buy goods from Russian ports, but due to official power, it is difficult for them to obtain information on crop production, inventory, and exports. The opacity of information has also exacerbated price fluctuations in the market.
Due to problems such as frost damage, analysts have drastically lowered Russian wheat production expectations, and wheat futures prices have also hit the highest level since July last year. According to the International Grain Council, Russian wheat production will drop by about 6% this year.
However, this data is not supported by field data. The Russian government occasionally publishes harvest forecasts, and independent consulting firms in Russia also conduct crop inspections and publish yield estimates, but to a certain extent, this does not dispel the market's doubts about the real state of Russian wheat.