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Russia’s MY 2021-22 wheat exports fall 18% through Nov 18; prices weaken

The pace of Russia’s wheat exports weakened for marketing year 2021-22 (July-June), as the world’s biggest wheat exporter increased export tariffs on shipments of the food grain.

The country’s wheat exports fell 18% on the year to 17.2 million mt between July 1-Nov. 18, according to data released by the Russian Federal Service for Veterinary and Phytosanitary Surveillance Nov. 24.

Its wheat exports for the year stood at 16.6 million mt through Nov. 11.

Turkey was the largest buyer of Russian wheat during the year, having purchased 3.4 million mt as of Nov. 18, followed by Egypt at 2.6 million mt and Kazakhstan at 1 million mt.

S&P Global Platts Analytics has projected Russian wheat exports at 36.5 million mt in MY 2021-22.

Russia sold 38.5 million mt of wheat in MY 2020-21, according to data from the US Department of Agriculture.

The pace of Russian wheat exports has been slowing since August as the taxes on exports have risen consistently, traders said.

Wheat prices rises
Export prices of Russian wheat declined in the week of Nov. 22, following a sharp rally in the week ended Nov. 19, as most consuming countries source their requirements from other suppliers.

S&P Global Platts assessed FOB Russia 12.5% protein wheat at $344/mt Nov. 23, down $1.25 from an all-time high of $345.25/mt assessed Nov. 22.

Concerns of tightening supply from Canada due to logistical constraints amid flooding had boosted prices, analysts said, but the sentiment dampened with railway services resuming in Vancouver Nov. 24.

Traders expect the prices to remain firm over the next few months, as Russia will impose an export quota for the January-June period.

Russia raised its export taxes on wheat to $78.3/mt for the Nov. 24-30 week, up $1.2 from the previous week.

It introduced the floating rate in June, replacing the fixed rate mechanism of Eur50/mt ($58.78/mt). The duty is applied when the export price of wheat exceeds $200/mt and is calculated as 70% of the difference between the market price and that benchmark.

Harvest progress
The country’s MY 2021-22 wheat harvest has almost concluded. It harvested 78.6 million mt wheat as of Nov. 23, nearly 11% below the 88.1 million mt produced during the same period a year ago, according to its agricultural ministry.

Russia’s wheat output is expected to decline in MY 2021-22, due to adverse weather conditions, particularly in the Urals and Volga regions.

Platts Analytics has projected Russia’s wheat crop at 77.6 million mt in MY 2021-22. Russia harvested 85.9 million mt of wheat in MY 2020-21.
Source: Platts

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