Rostov, region of Russia taken by rebels, is an important center for commodities – 06/24/2023 – Market

The Russian city Rostov-on-Don, whose control was announced by the mercenary leader, Yevgeny Prigozhin, is an important center for the production and distribution of commodities.

Russia is the world’s biggest wheat exporter, with Rostov second among its producing regions and home to the Don River ports, which link grain-exporting ships with the Sea of ​​Azov.

“The size of the risks is not known at the moment. It all depends on how the situation develops. For now, everything continues to work as usual,” said Andrey Sizov, head of agriculture consultancy Sovecon.

“But the timing, of course, is inconvenient,” said Sizov, referring to the start of the harvest in the region in about a week.

So far, soldiers from the private Wagner militia seem to have taken control of only the region’s main city – Rostov-on-Don – and are advancing north.

Russia’s main grain export terminals on the Black Sea are further south, and this area has not been affected by events so far.

The main Black Sea port – Novorossiisk – continues to function normally, two sources in the grain sector told Reuters on Saturday (24).

Russia is expected to export 46.5 million tonnes of wheat in the new 2023/24 crop, which starts on July 1, according to the US Department of Agriculture.

OIL AND GAS

The Rostov region is not a major energy producer, but several oil and gas pipelines pass through its territory. Russia is the second largest oil exporter in the world after Saudi Arabia.

One such pipeline, the Kuibyshev-Tikhoretsk, can deliver 0.8 million barrels a day to the port of Novorossiisk in the Krasnodar region, Russia’s biggest oil export port on the Black Sea.

Transneft, which has a monopoly on oil pipelines from Russia, controls many pumping stations along this route, including in the Rostov region.

Rostov is also the site of a medium-sized oil refinery, Novoshakhtinsk, which can process 100,000 barrels a day.

Several oil tanks were on fire in the Voronezh region on Sunday, according to Russian media reports, but they are not of great importance for export.