Export prices for Russian wheat continue to decline after grain deal extension
Export prices of Russian wheat fell again last week as the world market eased due to good supply and an extension of the Black Sea grain deal, as well as local expectations of a cut in export duty, analysts said.
The deal to allow Ukraine to export its grain safely across the Black Sea was extended last week for two months.
The prices of Russian wheat with 12.5% protein content, delivered free on board (FOB) from the Black Sea in June, was $242 a tonne, down $6 from the previous week, the IKAR agriculture consultancy said.
“The market just stood still waiting for a decision on the export duty. Yes, there was a statement from the Ministry of Agriculture, but I would still like to see the formula,” said Dmitry Rylko, head of IКAR.
Last week the ministry confirmed its intention to raise the threshold price for the calculation of export duty from June 1 to 17,000 roubles from 15,000, which should result in the duty itself decreasing.
The Russia-focused agricultural consultancy Sovecon estimates total Russian wheat exports in May at 3.8 million tonnes, compared to 1.2 million tonnes in May 2022 and 1.5 million tonnes on average.
Russia exported 1.21 million tonnes of grain last week compared to 0.76 million tonnes a week earlier, including 1.07 million tonnes of wheat compared to 0.68 million tonnes a week earlier, Sovecon wrote in its weekly note, citing port data.
Weather conditions in Russia continue to be generally favourable for the new harvest, Sovecon said. As of May 18, 19.0 million hectares of crops were sown, compared to 17.6 million hectares by that date in 2022, of which 7.4 million hectares were under spring wheat (6.6 million hectares in the same period of 2022). The planting campaign pace is getting close to average, Sovecon said.
The agency on Friday raised its 2023 Russian wheat crop forecast to 88 million tonnes, up from 86.8 million tonnes previously.
Source: Reuters (Reporting by Olga Popova; Editing by Kevin Liffey)