As of April 1st, Russian total wheat stocks amounted to 27.6 million metric tons (MMT) according to Rosstat data processed by SovEcon. The numbers are record-high for the beginning of Q2 and exceed the five-year average by 79%. The stocks have significantly surpassed the average due to the record-high wheat crop and relatively sluggish exports.
In the South of Russia, total wheat stocks amounted to 12.4 MMT, an increase of 136% compared five years average. In the Center, farmers have accumulated 11.6 MMT of wheat, which is 86% higher than average.
The key factor contributing to the accumulation of stocks was the record-high crop of 2022. Rosstat estimates the Russian wheat crop at 104.2 MMT, which is 32% higher than the five-year average.
Export volumes during the 2022/23 season (July-June) did not match the major crop. Due to unfavorable weather, high freight rates, strengthening of the ruble, and export taxes, the export pace exceeded the average numbers only by February.
SovEcon estimates Russian wheat exports in July-March at 33.8 MMT, which is 10% higher than average. Overall, SovEcon expects Russia to export 44.4 MMT of wheat during the 2022/23 season.
Amid the record-high wheat stocks, the ruble wheat market may experience a decline in May. However, there are no expectations of significant export growth due to limiting factors such as infrastructure restrictions, exhaustion of individual traders’ quotas, and a limited supply of old crop that is below the recommended price threshold of $275 FOB.
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