Russia’s Wheat Export Duty Reaches Historic High
Today, for the first time ever, the export duty on wheat from Russia will surpass $100 per ton.
Continuously rising wheat prices are primarily a result of the Russian invasion of Ukraine, as the two nations supply more than a quarter of the world’s wheat. Alongside soaring fertilizer prices that have stymied global attempts at increasing production, high wheat prices have great potential to cause or worsen food crises for those most reliant on Russian and Ukrainian exports, mainly countries in North Africa, the Middle East and East Africa.
In the near-term, and as Egypt has already demonstrated, such nations will likely look elsewhere for much-needed supplies, especially as wheat prices are forecast to rise for the remainder of the quarter. Expect new actors to fill in any such gaps in the wheat trade – this includes Argentina, for whom the added trade value is the primary benefit, as well as international powers like India, France and the United States who can project soft economic and humanitarian power in Russia’s absence in the medium-term. Should the war continue into the long-term, direct Western sanctions on Russian wheat and agricultural products, while unlikely, could permanently reconfigure the international food trade.
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