Vladimir Putin is running into diminishing returns in his attempt to weaponise Russia’s strength in commodities trade.
Yes, Russia may gain some benefit from his smear against the deal to allow Ukraine grain shipments. Mr Putin alleged that vessels were heading to the European Union rather than to developing nations far more reliant on food imports.
But, if investors have it right, advantage looks likely to prove nowhere near as clear as that he is gaining from playing God with Europe’s gas supplies.
With gas, of which Russia is the top exporter, turning down the supplies to Europe has been a win-win for Mr Putin.
It has heaped political pressure on the European Union, which was last year reliant on Russia for 45% of its gas imports, and so placed stress on the region’s united front against his invasion of Ukraine.
And it has reaped a financial dividend, with soaring gas prices more than making up for the loss of sales volumes.
Russia expects its earnings from energy exports to rise by 38% this year to $337.5bn, according to reports last month.
Corn vs gas
However, returns to be made from Mr Putin’s meddling in the grain market look far less substantial.
Sure, he may curry some political favour with developing countries which choose to believe his allegations.
But it is difficult to see that doing Russia much good in the short-term.
And while he has aimed at another big European commodity vulnerability – the EU is forecast to be the top corn importer this season, overtaking China again – the region is nowhere near as reliant on the Black Sea for maize as it is for gas.
Russia and Ukraine between them are expected to export 16.2m tonnes of corn between them in 2022-23, equivalent to less than 9% of the world total, according to the US Department of Agriculture.
As for financial gains, these look like being less impressive too.
While prices of wheat, of which Russia is also the top exporter, initially soared on Mr Putin’s comments, they have not sustained their rally.
Chicago wheat futures stood, on a second contract basis, at $8.51 a bushel on Thursday, adding only a further 0.8% to the last session’s leap, and remaining well below the $13.63 ½ a bushel they jumped to in February on Russia’s invasion of Ukraine.
Besides, on this score, Russia will have to share the benefits with the EU, the second-ranked wheat exporter.
Certainly, Mr Putin has put down a marker that extending the Ukraine grain export deal, which could expire in November, is no formality.
He may well demand extra concessions – perhaps in return for turning up Europe’s gas supplies as winter approaches.
But to judge by the modest reaction to his speech by wheat futures, and the decline in prices of corn, of which Ukraine is a more important source, investors aren’t too worried.
And after all, turning off the taps again on Ukraine grain exports would hardly help the developing nations that Mr Putin says he cares so much about.