Russian Wheat Export Prices Conclude a Multi-Week Drop

Novorossiysk: The decline in Russian Wheat export prices that had been going on for several weeks came to an end after major Western traders announced that they would no longer handle Russian grain exports and after news broke that the Russian agriculture minister had provided unofficial direction to support export prices. Last week, Western traders, including global trading companies Cargill and Viterra, declared they would stop handling Russian grain exports as of July 1. In addition, Louis Dreyfus Company joined them, stating that grain export challenges are only getting more difficult with time.

According to the IKAR  agricultural report, the cost of Russian Wheat with a 12.6% protein content that is supplied free on board (FOB) from Black Sea ports increased by $0.9 to $272.9 per tonne. The prices were further supported by rumours that Russian authorities had unofficially advised exporters not to sell Wheat below $274.9–279.5/MT FOB . According to market research, Russia stated on March 24 that it wanted exporters to make sure that the prices paid to farmers were high enough to cover typical production costs, which would mean maintaining Wheat export prices at or above $274.9-279.5. During the week ending March 24, Russia exported 1.08 million tonnes of grain, 960,000 of which were Wheat. 969,000 tonnes of Wheat and 1.17 tonnes of grain were used as a comparison.

Russia is expected to export 4.4 million tonnes of Wheat in March, up from 4.2 million tonnes, which is the highest level for March since 2018. This is an increase from 2.0 million tonnes in March 2022. According to the Russian agricultural ministry, 0.9 million hectares of spring crops were sown this year, nearly twice as many as the year before. Further it has decline in the price of the Wheat in its domestic market.

The Russian government's accusations against its Wheat dealers may cause the price of exported Wheat to change in the upcoming month, according to the ChemAnalyst database.