Russia is now top wheat exporter, proving sanctions won’t work

Wheat, the world-feeding crop whose shortage was Pharaoh’s nightmare, is now at such a global surplus that last month its price was less than two-thirds its level in 2008.

Having rebounded in recent days to $4.05 per bushel from $3.62 last month, one might think that the commodity, which last June cost $5.07 per bushel and in February 2008 peaked at $11.94 is U-turning from glut to crunch. It isn’t.

Wheat prices have plummeted not for a circumstantial reason, like weather-driven bumper crops, nor for a cyclical reason like a major buyer’s recession. Though some such factors have been at play in this market, they were marginal compared with the structural fact that Russia, once an agricultural laggard, has joined the industry’s leaders — big time.

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