Russia wheat export prices rise for 4th consecutive week, shipments decline
Russian wheat export prices have risen for the fourth consecutive week due to declining shipments and an export quota. Prices reached $247 per metric ton FOB in March, driven by supply reductions. Poor weather at ports and frost risks further threaten exports. February wheat shipments are expected to decline significantly compared to last year, with forecasts lowered due to adverse conditions.
Russian wheat export prices continued to rise for a fourth consecutive week amid declining shipments as an export quota entered into force, analysts said.
Dmitry Rylko, head of the IKAR consultancy, said the price of Russian wheat with 12.5 per cent protein for free-on-board (FOB) delivery in March was up $2 from the previous week to $247 FOB per metric ton.
“Prices have risen primarily due to a sharp reduction in wheat supply,” he said.
The Sovecon consultancy estimated prices for Russian wheat with the same protein content and delivery terms at between $242 and $246 per ton, compared with $241 to $245 the previous week.
“Russian exporters need significantly higher FOB prices for acceptable margins”, Sovecon said in a weekly note.
Russia’s export quota started to take effect on February 15.
Despite continued price increases, exporters’ margins remain low. In addition, bad weather at ports has had a direct impact on shipments.
Fears of weather risks to US and Russian crops pushed up prices on world markets late last week, SovEcon noted The IKAR agricultural consultancy on Friday trimmed its overall forecast for Russia’s 2025 grain crop to 129 million metric tons from 130 million tons previously, saying that approaching frosts posed a risk for winter crops.
At the start of this week, a sharp drop in night time temperatures is expected in many of Russia’s main winter wheat producing regions.
Russia’s chief meteorologist Roman Vilfand said that temperatures would be below 19 degrees Celsius in the southern central region, but that snow which fell the previous day would reduce frost risks.
Weekly grain exports were estimated last week at 0.53 million tons, including 0.46 million tons of wheat. This was down from 0.66 million tons the previous week, when it included 0.58 million tons of wheat, Sovecon said.
It estimated February wheat exports at 2.0 million tons, compared with 4.1 million tons a year earlier.
IKAR lowered its estimate of wheat exports in February to 1.6-1.8 million tons from 2.0-2.2 million tons earlier due to poor weather at Black Sea ports and the weather forecast for the coming week.
Rail freight operator Rusagrotrans also lowered its estimate of wheat exports in February to 2.2-2.3 million tons, down from 2.4-2.5 million tons.
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Source : Business Standard
