Volga Baikal AGRO NEWS Update on the Wheat Price Development !!!

Just within a week, prices for the Russian wheat have risen by 10% !!!

Volga Baikal AGRO NEWS Update on the Wheat Price Development !!!

Just within a week, prices for the Russian wheat have risen by 10% !!!

A sharp decrease in the forecast of the Russian wheat harvest by the US Department of Agriculture led to a rapid increase in grain prices on the world market. Experts are confident that Russian consumers will not suffer from this. The country has a floating export duty, which cuts off part of the world price for the domestic market.

Over the past week, prices for Russian wheat have increased from $ 268 to $ 295 per ton and are “looking towards $ 300”. Prices for American and French wheat have already overcome the psychological mark of $ 300 per ton.

Last week, the USDA lowered the estimate of the Russian wheat harvest by 12.5 million tons at once (from 85 million to 72.5 million tons, excluding Crimea). The previous USDA forecasts of 85 million tons of wheat for Russia were too optimistic, and the new estimate is, on the contrary, too pessimistic.

In fact, everything is going quite well with the harvest in Russia. According to Vladimir Petrichenko, general director of the analytical company ProZerno, Russia will harvest 77.1 million tons of wheat with a total harvest of 123 million tons of grain. This is the third result in the history of Russia after the record in 2017 (135.4 million tons of grain) and last year’s figures (133.5 million tons). At the end of last week, the Ministry of Agriculture of Russia confirmed its previous estimate: 127.4 million tons of grain, including 81 million tons of wheat. According to the head of the department Dmitry Patrushev, despite the unfavorable weather in the Volga region and the center of the country, an impressive harvest in the south and an increase in yields in Siberia allowed to minimize these consequences.

The USDA forecast was based on Rosstat data from the beginning of August. According to them, the area of grain was almost 1 million hectares less than in 2020. Rosstat data assess the situation at the beginning of June. But even after this date, farmers continued to sow the areas where winter crops died. And the data of the Ministry of Agriculture of Russia take into account the conducted re-sowing on these very 1 million hectares, – the ministry said.

Vladimir Petrichenko does not see a catastrophe. Wheat prices on the world market have repeatedly risen higher: for example, in the 2012/2013 season, they reached $ 360 per ton.  And to stabilize domestic prices in Russia, a floating duty works: exporters are forced to reduce the price of grain purchases on the domestic market by the amount of the duty in order to be able to sell the goods on the world market. Now the duty is 30.4 dollars per ton. Rising world prices will affect its size in a month, theoretically it can reach 50-60 dollars per ton, – highlights V. Petrichenko.

Rossiyskaya Gazeta, Moscow, August 17, 2021


Author: Tatiana Karabut

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