Russian on-farm wheat stocks are 42% higher than average

The high stocks may support country’s wheat exports during the first half of 2023 and influence global market prices.

Russian on-farm wheat stocks were estimated to be 22.1 million metric tons (MMT) as of January 1, 2023, according to Rosstat data processed by SovEcon. This is 42% higher than the average for the past five years. The high stocks are expected to support active exports during H1 2023 and impact prices.

It’s important to note that on-farm wheat stocks only represent a portion of Russia’s total wheat stocks. The Rosstat numbers do not include data from small or off-farm enterprises. However, on-farm stocks are still considered a useful indirect indicator of country’s total wheat stocks.

In the first half of the 2022/23 farming season (July-June), Russian wheat exports were relatively modest, with total exports estimated at 22.7 MMT in December 2022. The exports were lower than the five-year average of 23.0 MMT, due to several factors, such as the strong ruble, high freight rates, and the impact of export taxes.

The record crop of 2022 also contributed to the stock increase. Rosstat has estimated the harvest at 104.4 MMT, a 37% increase from the previous year.

Given the high levels of wheat stocks and favorable prices for exporters, SovEcon expects a record-high export pace in the coming months. Exports in the first half of 2023 are forecasted to reach 21.3 MMT, compared to 10.9 MMT during the same period last year. Analysts at SovEcon believe that active exports from Russia will put significant pressure on global wheat prices.

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