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Exporters of Russian wheat have expressed doubts about the need for "spot benefits" for India, considering grain prices already competitive.
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Exporters of Russian wheat have expressed doubts about the need for "spot benefits" for India, considering grain prices already competitive.

Export companies doubt the need for "point preferences" to buy Russian wheat by India. Experts suggest selling grain from the intervention fund or reducing export duties for friendly countries. However, such measures may reduce prices in the global market without benefiting domestic producers.

26 March 2025 26 March 2025

Export companies involved in delivering Russian wheat abroad expressed doubts about the necessity of using "spot discounts". They point out that Russian wheat already has competitive prices on the global market. Therefore, they are skeptical about reports of the possibility of purchasing wheat at a discount from India, related to the rise in global grain prices. According to experts' estimates, the discount could range from $25 to $40 per ton.

The Chairman of the Grain Exporters Union, Eduard Zernin, noted that the current situation with India should be seen more as a probing of positions rather than full-fledged negotiations. He understands India's desire to buy wheat at a discount and pay for it in rupees, but for exporters, this is not a suitable option. Export companies constantly need working capital to finance agricultural producers and consolidate new batches of grain for shipment. Therefore, they cannot reduce the requirements for the speed of settlements and currency liquidity. Eduard Zernin added that Russian wheat already has competitive prices, as evidenced by record export shipment volumes. He also believes that additional benefits for some importers will cause misunderstanding among other buyers.

Grain market expert, Alexander Korbut, stated that India expressed interest in purchasing 5 million tons of wheat. However, other options were also considered to stabilize the market situation, such as selling grain from the intervention fund. He noted that there was no specification regarding the supplier, and almost all possible areas from which supplies could come were mentioned.

Alexander Korbut mentioned that if India acts as a unified consolidated buyer and purchases the entire amount of grain, wholesale purchases with a certain discount between market agents are possible. He considers this a normal phenomenon and sees no contradictions. Korbut also noted that Russian wheat is already sold at a discount compared to French wheat and other market participants. He proposed another option - a governmental solution. The government can temporarily reduce export duties or zero them within a certain quota for deliveries to friendly countries. Thus, the state can forego some income and ensure supply to a friendly country such as India.

However, Alexander Korbut believes that this approach is not entirely correct. He warns that purchases in such large quantities may lead to a decrease in prices on the global market but will not lead to an increase in purchase prices for domestic agricultural producers. He also notes that exports are necessary for the effective development of domestic agriculture, which is already suffering from export duties.

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