Andrey Sizov
30.10.2024
SovEcon has lowered its forecast for Russian wheat exports to 45.9 million metric tons (MMT) from 47.6 MMT last month. This is the lowest export level since the 2021/22 season when 33.4 MMT was exported. Exports are expected to be below recent years’ levels on smaller crop and export restrictions.
The worsening crop outlook continues to exert pressure on export volumes. SovEcon has revised its wheat production forecast for Russia downward to 81.5 MMT from 82.9 MMT in its previous update and 92.8 MMT last year, citing a sharp drop in yields in Siberia.
Another constraint on Russian exports could be the rise in export taxes on wheat. Starting October 30, the wheat export tax will be 2,228 rub/mt ($23/mt), up from 1,246 rub/mt ($13/mt) last month. It is expected to continue rising following official recommendations to increase export prices.
An additional factor will be restrictions on the export sales of Russian wheat by “foreign intermediaries.” This is expected to wind down the operations of many small and medium-sized traders who originate grain and sell it at FOB basis.
A traditional factor of smaller shipments will be the seasonal worsening of weather in the Black Sea from November and the closing of river navigation.
A reduction in Russian supply on the global market may support prices in the medium term.
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