Russia, the world’s biggest wheat exporter, is about to grab even more customers in the fast-growing economies of Asia — a region that normally gets most of its imported grain from somewhere else.
A farm industry that emerged from the former Soviet Union to become a wheat-trade powerhouse is poised to expand its market share in countries like China, Indonesia and Japan. That’s because droughts are eroding production in Australia, the U.S. and Canada. Those are the dominant suppliers of wheat to Asia, which accounts for about a third of global imports.
While shipments of wheat from Russia already were expected to exceed those of any other country, very little usually ends up in Asia, where imports have almost doubled in a decade as rising incomes boosted demand for noodles, cakes and breads. But this season, Australian production will plunge the most in a decade, American farmers will have their smallest harvest since 2002, and Canada’s crop will shrink for the third time in four years.
“Russia will be a big winner,” said Benjamin Bodart, a director at adviser CRM Agri-Commodities in Newmarket, England. “Russia’s crop is expected to be a record. They will need to find markets to supply that wheat to.”
For a second straight season, growers from the Black Sea to southern Siberia are collecting Russia’s largest wheat crop ever. The U.S. Department of Agriculture estimates production will rise to 77.5 million metric tons, exceeding domestic consumption by the widest margin on record.
The U.S. had been the world’s top exporter for decades, but was supplanted by Russia in 2015-16 before regaining the title last season. The USDA forecasts Russia will be back on top in the 12-month marketing season that began July 1, with exports jumping 13 percent from a year earlier to 31.5 million tons, almost three times what they were in 2012-13.
Russian wheat hasn’t been much of a player in Asia, partly because it’s such a long journey for grain cargoes. Exports must travel from the Black Sea into the Mediterranean, then through the Suez Canal and around India to reach countries like Indonesia, which has almost doubled imports in the past decade to become the world’s largest buyer after Egypt. Demand growth has been rapid in Southeast Asia, which vies with the Middle East and North Africa as the largest buying region, USDA data show.
To be sure, Russian shipments to south, east and Southeast Asia surged 60 percent in 2016-17 to 3…