World Grain - January 2016 - 6

FROM THE EDITOR-IN-CHIEF

Russia challenging
U.S. in wheat

bserving what some commentators
call the poker game over international
politics being played by U.S. President Barack Obama and Vladimir V. Putin,
president of Russia, prompted a look at the
real contest between the two nations that is
just as important to global well-being as is
¿JKWLQJRYHU&ULPHDDQG6\ULDZKHUHPRVW
media attention is centered. The United
States and Russia have been battling, albeit
fairly quietly, since the start of the 21st century for global leadership in wheat exporting. It is the current season, now near its
KDOIZD\PDUNWKDWPD\SRVVLEO\EHWKH¿UVW
in which Russia wins. While the attentiongrabbing political arguments that threaten
PLOLWDU\ FRQIURQWDWLRQ DQG UHYLYDO RI &ROG
War battles merit urgent attention, jousting
for leadership in wheat exports impacts a
nation's standing as the principal supplier of
essential food to countries that rely on imports to maintain their standard of living.
It now appears that America, which has
been the world's leading wheat exporter
for almost a century, may lose that position
to Russia in 2015-16. The latest forecast
RI ZRUOG WUDGH LQ ZKHDW DQG ÀRXU E\ WKH
,QWHUQDWLRQDO *UDLQV &RXQFLO SODFHV OLNHO\
U.S. exports at 24 million tonnes while
Russia is forecast to ship 23.1 million. That
would be the narrowest win for America in
global wheat exporting, with the fractional
PDUJLQ WR ¿UVW FRPSDULQJ ZLWK D JDS RI
million tonnes in 2014-15 and nearly 10
million in 2013-14.
Narrowing in America's margin has
occurred almost from the start of the 21st
century. Less than three decades prior to
2000 the Soviet Union, including Russia,
became the world's largest importer of
wheat, obtaining a major part of its domestic
food needs from U.S. ports. Russia,
until 1990 a country under the yoke of
&RPPXQLVP UDSLGO\ FRQYHUWHG WR D EDUHO\
free system transforming it from dependency
on imports to a strong competitor in global
markets. This is one of the genuine miracles
of modern markets. Yes, governments
continue to jiggle with supports to bolster
agriculture and, yes, governments seek to

LQÀXHQFHH[SRUWDFWLYLW\DVZHOODVLPSRUWV
but it's allowing market-based prices to
operate relatively freely that accounts for
this startling outcome.
As the global grain situation shifted from
periodic shortages to what is now a grain glut,
not only did Russia strive for global leadership
as a wheat exporter, but it was joined by two
of its neighbors, Ukraine and Kazakhstan,
DVVLJQL¿FDQWH[SRUWHUV7KXVWKH%ODFN6HD
emerged as a grain source strikingly similar
to America's Gulf coast. Dominance has been
facilitated by the nearness of major importers
like Egypt and nations of the Middle East
where supply problems are accentuated by
internal battling.
Besides geographic proximity and
abundant supplies, Russia's contending to
EH WKH OHDGLQJ ZKHDW H[SRUWHU UHÀHFWV WKH
weakness of the ruble, especially when
compared with the strong U.S. dollar.
Russia, its economy under serious pressure
due to U.S. trade sanctions and the collapse
of world oil prices, has seized upon wheat as
one of its major opportunities to earn foreign
exchange. This position was underscored by
its decision to impose a tax on wheat exports
meant to provide funding for the Moscow
government at a time when its sources
were limited. Whenever the possibility is
raised of Russia losing export business, the
government hints that the export tax may
be reduced or eliminated. Also understood
is a commitment to assuring quality that
centers on a minimum protein content of
11.5%. That rules out competition from the
European Union where the 28-nation bloc
is one of its principal adversaries in seeking
wheat sales to the Middle East.
Russia's capacity to continue to meet
demand while beating prices offered from
the United States and elsewhere depends
primarily on the size of crops. It is no
surprise that Russia's ascendance in wheat
H[SRUWLQJUHÀHFWVLWVQHZO\ZRQUROHDVWKH
WKLUG ODUJHVW ZKHDW SURGXFHU EHKLQG &KLQD
and India, and now ahead of America.
Morton I. Sosland
Editor-in-chief

Chairman and CEO
Publisher
Associate Publisher/
Managing Editor
Sales

Charles Sosland
Dan Flavin
Meyer Sosland
Adam Ungashick

EDITORIAL STAFF
Editor-in-Chief
Editor
Associate Editor
World-Grain.com Editor
European Editor
China Consultant
Designer

Morton I. Sosland
Arvin Donley
Susan Reidy
Holly Demaree
Chris Lyddon
Fengcheng Wang
Brian Peterman

PUBLISHING STAFF
President
L. Joshua Sosland
President Emeritus
Mark Sabo
Vice-President and CFO
Melanie Hepperly
Audience
Development Director
Don Keating
Design Services Manager
Doni Conarroe
Associate Design
Services Manager
Ryan Alcantara
Director of On-line
Advertising and Promotions
Carrie Fluegge
Director of e-Business
Jon Hall
Advertising Manager
Advertising Coordinator
Advertising
Materials Coordinator
Digital Systems Analyst
Circulation Manager

Nora Wages
Chelsea Bulmer
Debbie Maniez
Marj Potts
Whitney Hartman

Promotions Marketing Manager

Jim White

WORLD GRAIN (ISSN 0745-8991) Volume 34, issue 1,

is published monthly by Sosland Publishing Co.,
4801 Main Street, Suite 650, Kansas City, MO 64112 U.S.
Periodicals postage paid at Kansas City, MO 64108 U.S.
and additional mailing offices. Canada Post International
Publications Mail (Canada Distribution) Sales Agreement
Number 40612608. Send returns (Canada) to Pitney Bowes
International, P.O. Box 25542, London, ON, N6C 6B2. Printed
in the USA.
POSTMASTER: Send address changes to WORLD GRAIN,
PO Box 324, Congers, NY 10920-0324. © Sosland
Publishing Co. All rights reserved. Reproduction of the whole
or any part of the contents without written permission is
prohibited. WORLD GRAIN assumes no responsibility for the
validity of claims in items reported. Sosland Publishing Co. is
a division of Sosland Companies. Inc.
Editorial and advertising inquiries should be directed to our
world headquarters at 4801 Main St., Suite 650,
Kansas City, Missouri 64112 U.S. Tel: 1-816-756-1000,
Fax: 1-816-756-0494 or E-mail worldgrain@sosland.com.
Requests for reprints of articles should be sent to
reprints@sosland.com or call 1-816-756-1000.

January 2016 / World Grain / www.World-Grain.com

http://www.World-Grain.com http://www.World-Grain.com

World Grain - January 2016

Table of Contents for the Digital Edition of World Grain - January 2016