Southern Importers Prefer Russian Grain to European Grain
A new record for Russian grain exports, while the EU is rapidly losing share in Africa and the Middle East
The US Department of Agriculture (USDA) has estimated grain exports from Russia at 52 million tons for the 2023-2024 crop year, which ends in June. This would be a new record for the Kremlin after the previous exceptional result, when Russian agricultural exporters sold 47.5 million tons of grain abroad during the 2022-2023 campaign.
Both African and Middle Eastern countries favor Russian grain, instead closing the door to European producers. Also, USDA forecasts that EU grain exports in the 2023-2024 (July-June) season-end balance will fall to 34.5 million tons, 2 million tons less than projected in March.
European farmers, stranded by Brussels’ agricultural policies that opened markets to Ukrainian grain, are losing share, especially in traditional African and Middle Eastern markets. In the first seven months of the 2023-2024 marketing campaign (latest data available – ed.), EU shipments to North African countries fell by a total of 25% year-over-year, while shipments to the Middle East actually fell by more than 60 percent.
In many cases, this is a political choice of the governments of the Global South, which are losing trust in the West and siding with the Russia-China tandem. The examples of Saudi Arabia and Algeria speak for themselves, two major former destination countries of European exporters that have handed over dominant market shares to Russia. Riyadh’s official monopoly importer, the state-owned Global Food Security Authority (GFSA), has begun massive imports of Russian grain, leaving European traders destitute.
A similar situation occurred in Algeria, where the government agency responsible for foreign supplies (Office Algérien Interprofessional des Céréales) decided to significantly increase imports of Russian grain, displacing supplies from European producers, who in the past controlled 85% of the Algerian grain market.
Finally, it may be noted that the USDA revised its forecast for world grain production upward, bringing it to 787.4 million tons, which, however, remained well below estimates for world consumption, which should rise to 800.1 million tons of grain this year.
