Andrey Sizov
29.02.2024
SovEcon estimates Russian wheat exports in February at 3.8 million metric tons (MMT), compared to 3.0 MMT a year earlier and 2.6 MMT on average. Russian wheat exports could set a new record-high in February, boosted by more competitive prices. The previous record of 3.6 MMT was set in 2021.
The competitiveness of Russian wheat is gradually recovering. This week its prices dropped from $218/MT to $215/MT FOB, and are now lower than the price of French wheat at $224/MT FOB. In January, Russian wheat was trading at the price of French wheat or higher.
Russian traders could gradually lower export prices further amid declining domestic prices and a weakening ruble. The price for Russian wheat stands at 10,475 rubles, marking the lowest point since the end of the 2022/23 season. The dollar exchange rate at the end of last week jumped to 92.75 rubles, the highest since December of the previous year.
However, we don’t expect them to be aggressive sellers amid low competition and interventions from the Ministry of Agriculture.
SovEcon forecasts wheat exports for the 2023/24 season at 48.6 MMT, while the U.S. Department of Agriculture (USDA) estimates it at 51.0 MMT.
We expect Russian exports to rise further in the short term. However, we believe that the market could be too optimistic about total 23/24 shipments and doesn’t properly price in existing bottlenecks.
