January 28, 2023

Russian wheat prices increase slightly due to higher export demand

Analysts said Russian wheat prices have increased slightly last week due to demand from domestic exporters, while an increase in Black Sea grain shipments and a stronger Australian crop drove down global benchmarks, Hellenic Shipping News reported.

The IKAR agriculture consultancy said prices for Russian wheat with a 12.5% protein content that is delivered free on board (FOB) from Black Sea ports increased US$1 last week to US$306 per tonne.

Analysts from the consulting firm Sovecon said Russia is exporting wheat very quickly this month, adding that a good portion of the 570,000–600,000 tonnes of wheat that Algeria has purchased will come from Russia.

Sovecon said Russia exported 0.80 million tonnes of wheat last week as opposed to 0.67 million tonnes the week before. Compared to the average of 2.7 million tonnes seen in recent years, Sovecon predicts that Russia could export up to 3.7 million tonnes of wheat overall in January.

Russian grain and wheat stocks, analysts said, reached a record high at the beginning of the year as a result of record harvests and restricted exports.

Data from federal statistics agency Rosstat showed Russia had 22.1 million tonnes of wheat in stockpiles in December 2022, up from 13.8 million tonnes a year earlier.

Analysts said that these numbers might still be at record highs by the end of the 2022–2023 season.

Dmitry Rylko, head of the IKAR agriculture consultancy, said that everything is proceeding as expected, with record carryover stocks by the end of the season (June 2023) very likely.

-      Hellenic Shipping News