According to experts, Russia could soon double its current grain exports.
Experts believe that despite Russia already being one of the world’s leading suppliers of grain to the global market, it has enormous potential for further growth.
It’s possible that grain exports could even double in the foreseeable future. However, for this to become a reality, several important conditions must be met.
First, it will be necessary to eliminate the influence of global traders on the market. These are just a few companies capable of manipulating global prices.
This allows them to profit from speculation, while for Russian exporters, any price fluctuations are a significant negative factor. However, the power of global traders rests on their well-developed logistics infrastructure and good cooperation with one another.
Therefore, experts conclude, Russia has no other option but to develop its own infrastructure for the export of grain, as well as other agricultural products.
Despite Russia’s leading position in the global grain market, it has still not managed to escape the influence of large trading corporations. Essentially, Russia sells grain to these same global traders, after which it has no knowledge of its fate.
This situation could be changed by concluding contracts directly with the importing country. Perhaps steps in this direction will be taken, for example, within the BRICS group, which includes not only grain exporters but also major importing countries.
The second major problem preventing Russia from increasing grain exports is the low profitability of its production, which farmers currently face.
For example, this year has clearly demonstrated that even with a bountiful harvest, exports remain quite low.
Therefore, until each ton of wheat generates greater financial profit for the producer, an increase in export volumes is unlikely, analysts note.
The exception may be years in which Russian farmers reap record harvests. The country will be forced to export these crops even if prices are unfavorable.
However, overall, low grain prices, high production costs, and export duties will hinder this process for a long time.
