Demand for Russian wheat among exporters is gradually recovering, SovEcon said in a Weekly Report. Exporters are returning to the market ahead of the introduction of a grain export quota.
As of January 30, the amount of outstanding sales of Russian wheat reached 2.3 million metric tons (MMT), an increase from 1.9 MMT two weeks prior.
Demand from exporters for wheat has increased ahead of the export quota, effective from February 15 through the end of June 2024. Traders likely seek to fulfill their export contracts before this period.
The quota is set at 24 MMT for wheat, corn, barley, and rye, with no specific allocation for each crop. It will be allocated among traders based on their share of total exports from July to December 2023.
Reflecting the surge in demand, prices for wheat with 12.5% protein in the European part of Russia rose last week by 75 rub to 10,900 rub/mt.
The increased activity of Russian wheat exporters could exert pressure on global prices in the short term.