A Russian proposal to use its wheat stockpiles to supply aid to Syria may cut demand in the international market from the Middle Eastern country that’s estimated at more than 1 million metric tons this season.
That has the potential to add to a glut that’s pushed prices near 10-year lows as a bumper harvest drives exports from Russia, the biggest supplier, to a record. Syria is tendering for 1 million tons of wheat exclusively from Russia.
“If the humanitarian aid going out of the country is of a big volume, it won’t benefit international grain traders,” Dmitry Rylko, director general of the Moscow-based Institute for Agriculture Market Studies, said by phone. “That will mean Syria will leave the market as a buyer.”
Russian Deputy Prime Minister Arkady Dvorkovich ordered the government to come up with proposals to use wheat stockpiles for aid to Syria, according to his spokeswoman. Syria needs to import 1.3 million tons of wheat in the season started in July, U.S. Department of Agriculture figures show.
The suggestion comes as sales to Egypt, the largest wheat buyer, are cast in doubt by its rejection of any imports that contain the ergot fungus.