Russian wheat export prices extended fall last week on low demand, analysts say
25 апреля 2023 года
MOSCOW, April 24 (Reuters) - Export prices of Russian wheat continued to decline last week as low demand outweighed the impact on the market of uncertainty over whether the Black Sea grain deal will be extended, analysts said.
Prices for Russian wheat with 12.5% protein content, delivered free on board (FOB) from Black Sea ports, were $265 a tonne, down $6 from last week, the IKAR agriculture consultancy said.
Russia exported 1.11 million tonnes of grains during the week ended April 21, of which 1.0 million tonnes were wheat, SovEcon said. That was compared with 1.16 million tonnes of grain and 950,000 tonnes of wheat the previous week.
SovEcon downgraded wheat export estimates for April by 0.1 million tonnes to 4.2 million tonnes. Russia exported 2.4 million tonnes in April 2022, the average for the month being 2.7 million tonnes.
SovEcon noted growing problems with new export sales. Large traders’ outstanding wheat export sales fell again, to 1.6 million tonnes from 1.9 million tonnes a week ago and 2.3 million tonnes two weeks earlier. This is the lowest volume since November 2022.
Analysts attribute the drop to an unofficial price floor of $275 per tonne FOB, which affects the competitiveness of Russian wheat.
Last month, Reuters cited two sources as saying the government wanted exporters to ensure prices paid to farmers were enough to cover average production costs, which would mean keeping export prices for wheat at or above $275-$280.
The future of the Black Sea grain deal could be affected by Turkish elections on May 14 or by a potential Ukrainian counter-offensive, SovEcon said.
The deal allows Ukraine to export from its Black Sea ports, but Russia has said it will not extend it beyond May 18 unless barriers to its own food and fertiliser exports are addressed.
Overall weather conditions remain favourable for the new crop, SovEcon analysts noted. They have raised their 2023 wheat harvest forecast to 86.8 million tonnes from 85.3 million tonnes previously.
However, IKAR reduced its wheat forecast to 84 million tonnes from 86 million, and the grain harvest to 129.5 million tonnes from 131.5 million, mainly because of problems with the state of crops in the northeast of the European part of Russia's Black Earth region, as well as in the Volga region.
Last week, the Russian Ministry of Agriculture updated its 2023 harvest forecast to 123 million tonnes of grain, including 78 million tonnes of wheat.
Other Russian data provided by Sovecon and IKAR:
- Domestic 3rd class wheat, European part of Russia, excludes delivery (Sovecon)
- Sunflower seeds (Sovecon)
- Domestic sunflower oil (Sovecon)
- Domestic soybeans (Sovecon)
- Export sunflower oil (IKAR)
- White sugar, Russia's south (IKAR)
Russia has no plans to halt wheat exports - sources
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