Russia eyes wheat trade with Saudi Arabia

Saudi Arabian Energy Minister Khalid Al-Falih. (AFP)
Updated 05 September 2019

Russia eyes wheat trade with Saudi Arabia

  • Russian sovereign fund chief praises role of Saudi energy minister in stabilizing global oil market

VLADIVOSTOK: Russian Agriculture Minister Dmitry Patrushev and Saudi Arabian Energy Minister Khalid Al-Falih will discuss the development of bilateral relations, including agricultural trade, during their meeting on Thursday.

In August, Saudi Arabia decided to relax its bug-damage specifications for wheat imports, opening the door to Black Sea imports and strengthening ties with Russia beyond energy cooperation.

Al-Falih and Patrushev will meet as part of Patrushev’s visit to the Kingdom on Wednesday, the ministry added. Patrushev will also meet his Saudi Arabian counterpart, Abdulrahman Al-Fadhli.

Russia, the world’s largest wheat exporter, has long sought access to the Kingdom’s wheat market as Moscow tries to take further market share in Middle Eastern and North African wheat markets from the EU and the US.

After Riyadh said in August it would relax its limits for bug-damage in hard wheat to 0.5 percent from zero from its next tender, a Russian industry source told Reuters that Moscow would continue to press it to reduce the bug damage level to 1 percent.

A delegation from Russia, which includes major grain, meat and dairy companies, has also arrived with Patrushev.

Russia’s Saudi negotiators have praised Al-Falih, saying changes in the country’s oil industry would not affect Moscow -Riyadh cooperation. 

Ties between Russia and Saudi Arabia have developed in the last couple of years after the two countries, along with members of the Organization of the Petroleum Exporting Countries (OPEC) and some non members joined forces to curb output to support prices.

Russian Direct Investment Fund (RDIF) boss Kirill Dmitriev, a key player in the deepening cooperation between Moscow and Riyadh, praised work with Al-Falih and said that all existing plans remain unchanged.

“Saudi Arabia is an absolutely key partner for us. Khalid Al-Falih ... has played an absolutely key role in stabilizing global oil markets,” he said.

“We plan to make joint investments with Aramco in Russia ... Plans which we had remain.”

RDIF has partnerships with Saudi Arabia’s two sovereign wealth funds, the PIF and the Saudi Arabian General Investment Authority (SAGIA).

Russia’s Energy Minister Alexander Novak said on Wednesday that OPEC and non-OPEC countries would continue to coordinate on output.

“This is very important for the market to maintain its stability,” Novak said.

Aramco, the world’s top oil producing company, is preparing for an initial public offerring of up to 5 percent by 2020-2021 which could be the world’s largest.


Oil retreats in face of renewed coronavirus uncertainty

Updated 22 February 2020

Oil retreats in face of renewed coronavirus uncertainty

  • G20 finance leaders to meet in Saudi Arabia at the weekend to discuss risks to the global economy
  • OPEC+ has been withholding supply to support prices and many analysts expect an extension or deepening of the curbs

LONDON: Oil prices fell on Friday as weak Asian data and a rise in new coronavirus cases fuelled uncertainty about the economic outlook while leading crude producers appeared to be in no rush to curb output.

Brent crude was down $1.56, or 2.6 percent, at $57.75 in afternoon trade, while U.S. crude dropped $1.25, or 2.3 percent, to $52.63.

"With Brent failing to breach the $60 level on Thursday despite better than expected U.S. oil inventory data, rising market uncertainty is dragging down oil prices on Friday," said UBS analyst Giovanni Staunovo.

"Market participants who benefited from the price rise in recent days might prefer not to go into the weekend with a long position."

 

China reports rise in coronavirus cases.

Japan factory activity shrinks at fastest pace since 2012.

Russia says early OPEC+ meeting no longer makes sense.

Finance leaders from the Group of 20 major economies meet in Saudi Arabia at the weekend to discuss risks to the global economy after new Asian economic and health data kept investors on guard.

Beijing reported an uptick in coronavirus cases on Friday and South Korea reported 100 new cases, doubling its infections. In Japan, meanwhile, more than 80 people have tested positive for the virus.

Factory activity in Japan registered its steepest contraction in seven years in February, hurt by fallout from the outbreak. 

"We still believe that the market is likely to trade lower from current levels, given the scale of the surplus over the first half of this year, and the need for the market to send a signal to OPEC+ that they must take further action at their meeting in early March," said ING analyst Warren Patterson.

Russian Energy Minister Alexander Novak said on Thursday that global oil producers understood it would no longer make sense for the Organization of the Petroleum Exporting Countries and its allies to meet before the planned gathering.

The group, known as OPEC+, has been withholding supply to support prices and many analysts expect an extension or deepening of the curbs.