Russia eyes wheat trade with Saudi Arabia

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

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.