SovEcon estimates Russian wheat exports in January to be between 3.5-4.0 million metric tons (MMT), down from 3.9 MMT a year earlier. This marks the third consecutive month of exports lagging behind the previous year’s figures. Russian exports decline amid decreasing competitiveness of Russian grain.
Russian wheat shipments have slowed compared to last month. As of January 16, the amount of outstanding sales of wheat was 2.0 MMT, down from 3.3 MMT a month earlier.
The competitiveness of Russian wheat compared to European suppliers has diminished. SovEcon estimated the price of Russian wheat with 12.5% protein at $244.5/MT FOB at the end of last week, while French 11% wheat was offered at $243/MT, $1.5 less. Two months ago, Russian wheat was $18 cheaper than European wheat.
Efforts by the Russian government to regulate wheat prices might be influencing its global market competitiveness. During January’s tender by Egypt’s GASC, Russian suppliers consistently offered wheat at $265/MT FOB with a 270-day payment term. These offers likely aligned with the “minimum recommended price” established by Russia’s Ministry of Agriculture, as reported by Russian media.
The ruble’s strengthening for the second consecutive month may have also contributed to the slowing of Russian wheat exports. The dollar-to-ruble exchange rate fell to 88.5 rubles on January 15, compared to 91.3 rubles two months prior.
In December, SovEcon lowered its estimate for Russian wheat exports in 2023/24 by 0.2 MMT to 48.6 MMT, while in January, the U.S. Department of Agriculture raised its estimate of Russian exports by 1.0 MMT to 51.0 MMT.
Sluggish exports in the short term could support the global wheat market.