Russia could yet – heaven forbid – hold the world to ransom over wheat.

Sure, the country exposed the current limitations of its leverage over wheat markets last week, when it quit the agreement allowing Ukraine safe grain exports, only to rejoin three days later after its deal partners called its bluff.

But that does not mean that Russia could never get a powerful grip. And soon.

The world is only a few weather upsets away from President Vladimir Putin being able to use the key food staple as a pawn in his political games.

On a leash

This season there is enough wheat around to avoid importers being too beholden to Russia.

Russia will ship 36.6m tonnes of wheat in 2022-23, on International Grains Council estimates.

That is enough to make it the world’s top exporter, but not by much. The EU will export only 200,000 tonnes fewer, the intergovernmental group believes.

In fact, Russian shipments will account for 20.7% of total world exports this season, a little below the 21.0% share recorded a year ago, and despite a far bigger harvest.

Concerns over dealing with Russia, in the face of Western sanctions, are seen limiting importers’ appetite for the country’s supplies.

That will curtail President Putin’s ability to weaponise wheat.

Inventory drain

But that situation could change if 2023-24 proves another tricky growing year elsewhere.

Keeping a lid on Russia’s shipments this season will come at a cost to Western reserves.

Stocks in the other major exporters – Argentina, Australia, Canada, the EU, Kazakhstan, Ukraine and the US – will end at their lowest since the grain market squeeze of 2007-08.

By contrast, Russia will, thanks to its strong harvest and relatively modest exports, end the season with an ample stockpile. T

The amount of wheat carried over to 2023-24 in Russian stores, as a share of that held by all the top exporters, will near-double year on year to a record 35%, on IGC estimates.

(The proportion could yet prove higher still, given that the IGC’s data factor in a 17.5m-tonne Argentine wheat harvest estimate which, according to the Buenos Aires grains exchange, is 3.5m tonnes too big.)

Best, worst case scenarios

So it is imperative that the world’s other main suppliers reap decent 2023 crops.

Should they manage bumper harvests, and replenish their stocks, Russia’s huge inventory would become an agricultural millstone – depressing local prices and farmers’ profits, and adding to damage from the Ukraine war.

However, should their production come in short, Russia’s wheat stocks would become political gold dust, giving President Putin power over importers’ supplies of such an important food staple.

And don’t expect buyers to stick to prioritise democratic principles over keeping populations fed.

That would risk political suicide. History is littered with examples, from the French Revolution of 1789 to the Arab Spring uprisings 11 years ago, of hunger triggering social unrest sufficient to overthrow governments.

Early warnings

Will nature co-operate?

There is reason to worry. Soil in some parts of Europe remains dry, even as winter wheat crops are establishing. Meanwhile, in France, Arvalis has cautioned that the warmest October in more than 40 years has left winter grains vulnerable to a sudden onset of winter temperatures.

In Ukraine, farmers are expected to plant 3.8m hectares of winter wheat, down from 6.1m hectares last year – reflecting the difficulty of farming in the war-torn country, as well as a loss of area to Russia.

Australia’s bumper crop faces downgrades thank to excessive rain.

In the US, the opposite is the case, with the country’s drought-tested winter wheat crop making its worst start, in terms of official condition ratings, on data going back 35 years.

More than 90% of Kansas, the top US wheat-growing state, is in drought, official data show.

Dwindling inventories

That is not encouraging. The US – long-known in the trade as the world’s wheat supplier of last resort – is expected in 2022-23 to see its stocks fall for a sixth successive season, to their lowest since 2007-08.

Heaven forbid the US should lose its last reserve status to Russia.