Russian Wheat Export Prices Decreased in Line With International Standards

Russia: During the first week of December 2022, Russian Wheat export prices slightly decreased in response to a drop in product prices in Chicago and Paris, which was supported by a record harvest in Russia and active supply from the Black Sea. Prices for Russian Wheat with a 13% protein content that is supplied from Black Sea ports were $315.5 per tonne Free on Board (FOB) as of the first week of December, down $2.5 from the last week of November 2022, according to the IKAR agriculture consultant. With 1 million tonnes of grain sent last week, Russia continues to export Wheat at a comparatively rapid rate for this time of year. The price of Wheat for immediate delivery decreased from the previous price by almost $1 to $315-319 per tonne. There is demand in the market, but Russian Wheat seems to keep winning the main export business, further supporting the decrease in the export price of the product.

For the state stockpile during the current July-June season, the Russian agricultural ministry has already purchased 2 million tonnes of grain from the domestic market. Up to 3 million tonnes are anticipated to be purchased by the government this year. According to the domestic consultancy, farmers have planted winter cereals on 18 million hectares, down from 19 million hectares at the same time last year. According to Sovecon, the weather in Russia's Volga and central regions is still favorable for growing winter Wheat, while it is dryer than usual in the country's important Wheat-growing south.

According to the ChemAnalyst database, it is anticipated that lower domestic Wheat export prices in Russia, supported by higher-than-planned export shipments, will drive hopes for a reduction in rising food prices. As per the U.S. Department of Agriculture, Russian Wheat production will also increase by around 20% to a record level for the 2022-2023 marketing year. In contrast to the United States and Europe, where drought and heat waves limited output, Russia had strong harvests in the summer and fall.