“There is huge potential for Russian wheat to be exported into Saudi Arabia,” said Swithun Still, director of grain trader Solaris Commodities SA in Morges, Switzerland.
Russian Deputy Agriculture Minister Sergei Levin has told Saudi officials that Russian firms want to start shipments. The Saudi agency that runs grain imports has also invited Russian companies to register for the tenders, although it has yet to change the rules.
Germany, Canada, Poland and Lithuania are among the top shippers to Saudi Arabia, according to the nation’s state grains importer. While it only accepts wheat with zero bug damage, Russian cargoes typically contain 0.5 percent of grain damaged by insects, the Institute for Agriculture Market Studies said. That may mean a compromise needs to be reached.
“We need to solve this problem,” said Dmitry Rylko, director general at IKAR in Moscow. “They would have to lower their bar for bug damage. In the foreseeable future, Russia will hardly be able to guarantee no bug damage in exports from the Black Sea.”