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IKAR in Mass Media

Export prices for Russian wheat fell last week ahead of grain deal decision

11 мая 2023 года

MOSCOW, May 10 (Reuters) - Export prices for Russian wheat weakened amid continued high export volumes, uncertainty surrounding the Black Sea grain deal and in anticipation of a new crop, analysts said on Wednesday.

Prices for Russian wheat with 12.5% protein content, delivered free on board (FOB) from the Black Sea in June, were $254 a tonne, down $11 from last week, the IKAR agriculture consultancy said.

Four-way talks on the grain deal, between Russia, Ukraine, Turkey and the United Nations, are due to take place in Istanbul this week.

The Kremlin said on Wednesday that Russia's stance on the Black Sea grain deal was understood by all relevant parties. Moscow has repeatedly said its own interests must be taken into account in talks aimed at extending the deal beyond May 18.

Egypt’s state grains buyer, GASC, bought 655,000 tonnes of wheat in an international tender last week. The total is believed to involve an estimated 535,000 tonnes sourced from Russia and 120,000 tonnes from Romania.

GASC's wheat was purchased at $260 and $250 a tonne on a free-on-board (FOB) basis.

"It seems that Russian traders stopped paying attention to that $275 (a tonne) unofficial price floor," Soveсon wrote, noting that the purchase with delivery in July at $250 a tonne FOB refers to wheat of the new crop.

Reuters cited two sources in March 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 to $280.

Russia-focused agricultural consultancy Sovecon estimates total Russian wheat exports in April at 4.3 million tonnes, compared with a record for this month of 4.9 million tonnes. Russia exported 2.4 million tonnes in April 2022, the average for the month being 2.7 million tonnes.

The first estimate of wheat exports in May is 3.6-4.1 million tonnes versus 1.2 million tonnes a year ago and 1.5 million tonnes on average.

Spring wheat is seeded at a record pace for recent years amid generally favorable weather conditions and warm weather at the start of the campaign, Sovecon noted.

As of May 4, farmers seeded 10.5 million hectares of grains compared to 6.1 million hectares in 2022, including 3.5 million hectares of spring wheat (1.3 million hectares in 2022) and 4.0 million hectares of spring barley (2.5 million hectares).

Other Russian data provided by Sovecon and IKAR:

Source: Reuters  |  #grain   |  Comments: 0   Views: 21

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