Volga Baikal AGRO NEWS Update on the Export Prices for the Russian Wheat !!!
Export prices for the Russian wheat have risen sharply.
Indicative export prices for Russian wheat with 12.5% protein for delivery in May-June continued to grow, reaching levels of $410-415/t FOB (+$25/t compared to the previous week).
Prices in other exporting countries were also actively growing. This was facilitated by the following factors observed in the market:
- the introduction of restrictions on the export of Indian wheat and a significant reduction in its export potential from previous estimates of 8-12 million tons to 4.5-5 million tons, of which more than half of this volume can be shipped in the first two months of the local season (from April).
- news about the deterioration of winter wheat in the United States and the continued lag in spring sowing.
The cost of wheat of the 4th class in deep-water ports was in a downward trend, adjusted to 15.5 thousand rubles/ton without VAT. This is 400 rubles cheaper than the previous week. The ruble continued to strengthen, the export quota of 8 million tons was selected by more than two-thirds, a number of large exporters have either exhausted their volume or are close to it. Purchase prices at low water remained at the level of 14.9 thousand rubles/ton without VAT.
The domestic market continued to weaken in the South and remained at the same levels in other regions. In the South, EXW elevator prices for wheat of the 4th class dropped to 14.4-15 thousand rubles/ton without VAT (-300 rubles/ton). Processors offer higher prices than exporters, but the volume of their purchases is limited. “Taking into account the current exchange rate of the ruble and FOB prices and the increase in duties, the estimated prices for wheat exported through Novorossiysk in all regions are significantly lower than the actual ones,” analysts emphasize.
Export prices are approximately $400-405 per ton. The index of exporters’ purchase prices for wheat in the deep-sea ports of the Black Sea decreased by 3.8% over the week (from 16.1 thousand rubles to 15.5 thousand rubles per ton) against the background of declining demand on the eve of the end of the season and the strengthening of the ruble.
The forecast of wheat exports from Russia in May increased from 0.9 million tons to 1 million tons. In June, against the background of high prices, it may increase to 1.3 million tons, which is two times lower than last year, when exports increased sharply due to the transition from a flat duty of 50 euros /ton to a floating duty mechanism and its reduction. Wheat exports for the entire season-2021/22, taking into account the record export of wheat flour (about 0.6 million tons in grain equivalent), may amount to 33.3 million tons, which will allow Russia to maintain first place in the world ranking of exporters by a wide margin from the EU (30.5 million tons), analysts estimate.
The share of Russia in the 2021/22 season in the world wheat market (including flour), according to the forecast, will be about 16.5% against 20% in the record harvest of 2020/21 agricultural year. However, taking into account the export potential for both wheat and flour, the country’s share may return to previous values in 2022/23.
The duty on wheat exports from Russia from May 25 to May 31, 2022 will decrease to $110.5 per ton against $111.9 per ton this week, according to the materials of the Ministry of Agriculture. The duty on barley exports remains at the same level of $76.5 per ton, the duty on corn will decrease to $76.5 against $77.3 per ton. The wheat rate is calculated based on the indicative price of $357.9 per ton, for barley — $294.3 per ton, for corn — also $294.3 per ton.