(Bloomberg) -- Russia is storing a record amount of wheat because the world’s biggest exporter can’t ship out its bumper crop fast enough.
The country’s stockpile increased by 22 percent from a year earlier to 33.8 million metric tons by Oct. 1, an all-time high for post-Soviet Russia, according Moscow-based consultant SovEcon. While farmers boosted production by a fifth this year, exports have remained little changed, lagging expectations.
The ruble’s rebound made the grain more expensive for overseas buyers and exports also suffered when Egypt, a major purchaser of Black Sea grain, briefly halted imports earlier this year amid a standoff with traders. As the growing inventory adds to a global glut that has sent prices tumbling, Russian traders are seeking lower rail rates to help boost shipments.
“Exports have been middling so far,” said Andrey Sizov Jr., managing director at SovEcon. The country usually tries to “rush” shipments in the first half of the season as storage capacity fills and farmers raise money for new plantings and to repay loans, he said.
Russian farmers are having to contend with the stockpile, equal to half of U.S. production, at a time when the country’s wheat price is about 12 percent lower than a year earlier. Bumper harvests from major producers around the world have pushed benchmark prices in Chicago to near a 10-year low.
Outbound shipments from July through September fell about 1 percent from a year earlier to 9.05 million tons, government data show. On Thursday, SovEcon lowered its forecast for the full season by about 1 percent to 30 million tons.
While shipments so far have disappointed, Russia’s still managing to reach markets it didn’t sell to last season, partly because a poor crop in France has hurt exports from the European Union’s biggest grower. Russia sent wheat to Algeria, South Korea and Thailand this season, and increased exports to Morocco, agriculture agency Rosselkhoznadzor said. Some grain has also gone to the the Philippines, SovEcon’s Sizov said.
Russia will export “more aggressively” in the second half of the season as inventories weigh on prices in the domestic market, Sizov said. Wheat for loading at Black Sea ports has climbed about 7 percent since touching the lowest in at least six years in July, according to the Institute for Agricultural Market Studies.