October 24, 2023

Demand for Russian wheat on the rise as export prices drop

Russian wheat export prices declined again last week, but analysts see demand picking up at these levels.

The price of 12.5%-protein Russian wheat scheduled for free-on-board (FOB) delivery in the latter part of November was $224 per metric tonne last week, down $1 from the week before, the IKAR agriculture consultancy reported.

IKAR analysts nonetheless said some signs of stabilisation were emerging after quite a long period of decline and some demand. The Sovecon agriculture consultancy saw the price for the same class of wheat last week at $228-236 per ton FOB, down $7 from the week before.

"Russian wheat has regained its competitive edge recently. Additionally, with a stronger rouble and smaller margins, it looks like exporters can't lower FOB additionally from the current levels," Sovecon said in a weekly report.

Russia exported 1.08 million tonnes of grain last week compared with 1.02 million tonnes a week earlier, including 0.94 million tonnes of wheat, compared with 1.00 million tonnes a week earlier, Sovecon wrote in a weekly note, citing port data.

The estimate of wheat exports in October was revised up 0.1 million tonnes from last week to 4.2 million tonnes, compared with 4.5 million tonnes a year ago and 4.1 million tonnes on average.

The wheat harvest, as of October 19, totalled 92.9 million tonnes versus 104.2 million tonnes а year earlier, from 28.4 million hectares planted versus the previous year's 29.1 million hectares.

The average yield came in at 3.27 tonnes per hectare, against 3.59 tonnes per hectare a year before. Sowing of winter grains was carried out on an area of 16.1 million hectares, up from 15.8 million hectares a year earlier, Sovecon wrote.

"The top grower (among Russian regions), South, remains too dry, and the plants are expected to enter the winter in below-average shape," Sovecon analysts said.

- Times of India