In August 2016, wheat price went below 4 dollars a bushel for the first time since 2006 after huge harvests and good weather. Taking advantage of the West’s economic sanctions, Russia modernized its agriculture and delivered the largest harvest in the past 25 years with 74.6 million tons, up 24% from 2015.
Russia has therefore managed to become a grain superpower again with the successful 40% growth of its grain exports over the past decade, something unseen since the creation of the USSR in 1922. Four decades after the Soviet Union welcomed more than necessary imports of wheat from rival United States, Russia turned into the fastest-growing export source and sent a significant portion of its production to countries like Egypt, Nigeria and Indonesia.
With less storage capacities, Russian wheat must be sold faster – and thus cheaper – than US and European equivalents of higher quality. “We will be able to (harvest) 150 million tons in 10 or 15 years at the most (all products included, compared to 115 tons currently). We will be able to feed the country,” said Russian Agriculture Minister Alexander Tkachev. Farm and food exports made around 5.5% of Russia’s total in 2016.